Federal tax cut for craft breweries set to expire

Posted at 11:35 PM, Oct 10, 2019
and last updated 2019-10-10 23:36:04-04

GRAND RAPIDS, Mich. — A federal tax cut that provides relief to craft brewers  is set to expire in just a couple months.

The tax cut passed by Congress in 2017, helped a lot of local breweries expand and now there's a nationwide effort to make sure they keep seeing the benefit of a lower rate.

Across the nation, craft beer makers are urging Congress to pass the Craft Beverage Modernization and Tax Reform Act.

The current legislation gives small brewers a 50% reduction of their federal excise tax, but it expires at the end of 2019.

"It was relief for a lot of us," Cedar Springs Brewing Company's Dave Ringler said. "I can speak personally, that gave us a little cash flow ease. It was something we used to hire employees, buy new equipment. It definitely helped out."

The new act would make that tax cut permanent.

"We’re all little guys," Ringler added. "Almost all of us are entrepreneurs that are sole proprietors or small business people, so it really does help Main Street."

"Small breweries really are the lifeblood of small communities," Ringler added. "It's been a huge part of revitalization in communities not only here in Michigan but nationally."

Ringler noted the craft beer industry continues to grow, but the growth is slowing and the competition is increasing.

"Every little bit helps,and every little bit hurts. Every dollar does count as we are trying to employ as many local people as we can," he said.

"Craft brewing has a lot of ancillary effects," Ringler explained. "We are big part of local tourism, and we are big part of local agriculture." They use many local suppliers in both their breweries and their restaurants, he said. "so it does have a trickle-down effect all the way across the board. When we have to tighten our belts, it spreads across to all those areas."

The bill was re-introduced in February and has wide support. As of the end of September, it has close to 300 co-sponsors, including 12 of the 14 Michigan members of the House. There is also a version in the Senate.