New tax law benefits 75 breweries in Montana
December 20, 2017 – A 2-year version of the Craft Beverage Modernization and Tax Reform Act (CBMTRA), which lowers the federal excise tax for breweries, was passed on December 20, 2017 by the 115th U.S. Congress.
Senator Jon Tester and Senator Steve Daines both cosponsored the CBMTRA, which was ultimately incorporated into the tax reform package passed this week.
“Thank you to Senator Tester and Senator Daines for their steadfast support of Montana’s craft brewing industry,” said Nolan Smith, president of the Montana Brewers Association. “Our senators understand that with 75 breweries creating jobs and economic growth in communities across our state, Montana craft beer is good for Montana’s economy.”
Under the bill, the federal excise tax will be reduced to $3.50/barrel (from $7/barrel) on the first 60,000 barrels for domestic brewers producing less than 2 million barrels annually, and reduced to $16/barrel (from $18/barrel) on the first 6 million barrels for all other brewers and all beer importers. The bill would maintain the current $18/barrel rate for barrelage over 6 million. This savings will allow Montana’s 75 small breweries, including many manufacturers and entrepreneurs, to reinvest in their businesses, expand their operations and hire more workers. The legislation is currently written as a 2-year provision.
“This reduction in taxes will allow Montana brewers to invest in their businesses thus creating more craft brewing jobs and supporting Montana hops and barley growers,” said Smith.
The effort to bring meaningful federal excise tax relief to small brewers has been a primary political objective for the Brewers Association (BA) and state guilds from across the country for almost 10 years.
“Our expectation is that small brewers will use their savings related to the recalibration of the federal excise tax on beer to invest in their breweries, expand their operations, create more jobs and hire more American workers,” said Bob Pease, president and CEO, Brewers Association. “We are very appreciative that Congress has enacted these bipartisan, strongly supported measures.”