Federal excise Tax Increase

Tax ExciseThank you to all who have already contacted your U.S. Senators on the issue of federal excise tax increases.

For those of you who haven’t, please immediately call and email the offices of your Senators concerning the excise tax increase being considered in the Senate Finance Committee.

The committee is at a critical point in their deliberations. We may have only hours more to make our voices heard.

Every Senator must hear a strong voice of opposition from their constituency to increasing the tax, as this will give us the best chance of turning back this proposal before any legislation is drafted.

Make these contacts now…before it’s too late.

Following is the email sent out previously on contacting Senators, with helpful background and talking points. 

BA Brewery Members,

We collectively face an extremely serious threat to the small brewing industry and to the very existence of some of its members. As you know, the Senate Finance Committee in Washington, DC has held hearings on, and is currently deliberating the merits of, a proposal to increase and equalize the excise tax for alcohol beverages in order to fund healthcare reform. This proposal would triple the excise tax for 4.5% ABV beer and impose even higher excise tax rates for higher ABV beers. 

Brewers Association staff and Board members have been actively engaged in building the case against an excise tax increase, recently submitting a letter to the Committee outlining our opposition. 

We need you to speak out now.

The ask of you is simple:

Point 1 – Oppose the Tax Increase. Contact your two U.S. Senators and let them know that you oppose, in the strongest possible terms, raising the federal excise tax on beer by any amount.

If one of your Senators sits on the Senate Finance Committee (roster of members below), urge them to oppose this proposal in committee deliberations. If your Senators are not members of that committee, ask them to contact their Finance Committee colleagues and express their opposition to this proposal moving forward.

Talking points on this issue appear below.

Point 2 – Support S. 1058. Ask them to sign on as a cosponsor of S. 1058 (identical to HR 836 introduced in the House of Representatives in February), the bill that would halve the small brewer excise tax differential, from $7.00/barrel to $3.50/barrel on the first 60,000 barrels.

Why cut taxes in an economy where funding shortfalls are rife? Because easing the tax burden on businesses in such a challenged economy will result in a reinvestment and recommitment in the very businesses that built the strong economy we once enjoyed and will enjoy again. For talking points on this legislation, see the BA Excise Tax Resource Page or simply thank your Senator if they are already a supporter (to view the current roster of Senators who have signed on, enter “S1058” in the search box as a “Bill Number” search here.

Take Action – Call and/or email your Senators’ Washington or district offices and make your personal case against this massive excise tax increase and in support of S. 1058.

As always, thanks for your support.

Charlie Papazian

President, Brewers Association

Senate Finance Committee Members: 

Baucus, Max (MT), Chairman Bingaman, Jeff (NM) 
Bunning, Jim (KY) Cantwell, Maria (WA) 
Carper, Thomas R. (DE) Conrad, Kent (ND) 
Cornyn, John (TX) Crapo, Mike (ID) 
Ensign, John (NV) Enzi, Michael B. (WY) 
Grassley, Chuck (IA), Ranking Member Hatch, Orrin G. (UT) 
Kerry, John F. (MA) Kyl, Jon (AZ) 
Lincoln, Blanche L. (AR) Menendez, Robert (NJ) 
Nelson, Bill (FL) Roberts, Pat (KS) 
Rockefeller, John D. (WV) Schumer, Charles E. (NY) 
Snowe, Olympia J. (ME) Stabenow, Debbie (MI) 
Wyden, Ron (OR) 

ISSUES OF IMPORTANCE TO SMALL BREWERS EXCISE TAXES

Small brewers are small Main street businesses, typically employing 10 to 50 employees. 

We represent only 4% of the entire U.S. beer market by volume, with 95% of us being very small businesses (producing 15,000 barrels or less per year). 
We strongly oppose proposals to increase the excise tax on beer.

Proposals to increase and equalize the tax among all types of alcohol will tax small brewers at the highest rates because our specialty, gourmet and innovative beers typically have higher alcohol contents. 
Brewers already pay a disproportionately higher share of taxes compared with other products – federal, state and local taxes represent over 40% of the retail price for beer while the same taxes equal nearly 24% of the price for all other purchases. 
Higher taxes will worsen the economic recession – resulting in less competitive products, reduced sales and revenues, lost jobs and, for some small brewers, business closures. 

$1 per case excise tax increase will typically cost the consumer at least $1.69 due to successive mark-ups as the case moves from brewer to wholesaler to retailer. 
Many small brewers are struggling to deal with the consequences of the 2008 spike in ingredient and operational costs and in the near future will also be faced with significant new costs to address pending federal labeling requirements. The cost of these new requirements for small brewers alone is collectively estimated to be up to $100 million.

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One Response to “Federal excise Tax Increase”

  1. I’ve been interested in taxations for lengthier then I care to admit, both on the individual side (all my employed life-time!!) and from a legal standpoint since satisfying the bar and following up on tax law. I’ve supplied a lot of advice and righted a lot of wrongs, and I must say that what you’ve put up makes complete sense. Please carry on the good work – the more people know the better they’ll be equipped to deal with the tax man, and that’s what it’s all about.

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