Competing Congressional bills take aim at excise tax on beer

While lawmakers in Maine are working on bills to help craft beer in Maine, there are two bills also being looked at by Congress that will affect beer nationwide.

The competing bills are:

The Small Brewer Reinvestment and Expanding Workforce Act, or “Small BREW Act”, is cosponsored by Senators Ben Cardin (D-MD) and Susan Collins (R-ME), and backed by the Brewers Association.

The Fair Brewers Excise and Economic Relief Act of 2015 or, “Fair BEER Act”, is cosponsored by Steve Womack (R-AR) and Ron Kind (D-WI), and backed by The Beer Institute – a national trade association for the American Brewing Industry.

Essentially the two bills do the same thing, they adjust the federal excise tax per barrel of beer produced in favor of the brewers (which hasn’t been changed since 1991), but there are some significant differences.

The Small BREW Act intends to reduce the federal excise tax on the first 60,000 barrels brewed from $7/barrel to $3.50/barrel, and then on the next 1,940,000 barrels reduce the tax from $18/barrel to $16/barrel, and beyond 2 Million barrels the rate stays at $18/barrel. This reduction only applies to breweries who “qualify” by brewing less than 6,000,000 barrels per year.

This does two things: it sets the bar for craft beer at 6 million barrels per year or less, and it excludes large corporate breweries from reaping the benefits of the tax break.

The Fair BEER Act intends on pushing a tax break in a tiered format:

  • 0-7,143BBL = no excise tax
  • 7,144 – 60,000 BBL = $3.50/barrel
  • 60,001 – 2,000,000 BBL = $16/barrel
  • Over 2,000,000 BBL = $18/barrel

While the Fair BEER Act will provide a larger tax break for the smaller breweries, the Beer Institute fact sheet states that 90% of federally licensed breweries fall under 7,143BBL per year and would pay zero federal excise tax, the bill does not impose a qualifier, meaning every brewery – including big corporate breweries – is eligible under the plan.

How do the bills affect Maine Brewers?

Here is the breakdown based on 2013 brewery numbers (2014 not yet available):

The Small BREW Act

Had the Small BREW Act been in place in 2013, Maine brewers would have paid around $830,000 less in federal excise taxes. They paid in a total of $3.15 million, so this act would have dropped that to $2.32 Million.

The Fair BEER Act

Had the Fair BEER Act been in place in 2013, Maine brewers would have paid nearly $1.06 million less in federal excise taxes. They paid a total of $3.15 million, so this act would have dropped that to $2.09 million.

It should be noted that only one brewery in Maine – Shipyard Brewing Company – exceeded the 60,000 barrel mark in this data, Allagash Brewing Company was close but not over. I did not see the actual number of barrels the breweries produced but this was enough information to know that most of the breweries in Maine fall into the lower two brackets of both bills.

Both bills will save Maine brewers money. The Small BREW Act saves less overall, but is designed to help only small craft brewers, where the Fair BEER Act saves more for the smallest breweries, but also allows for big breaks for large corporate breweries. The Beer Institute (pro Fair BEER Act) puts up a good front with a campaign to support all breweries, large and small, with no discrimination. On the flipside, the Brewers Association (pro Small BREW Act) supports a bill that helps small businesses with a tax adjustment. They aren’t asking to pay nothing, just less.

To be clear, these are breaks on one tax that brewers have to pay. They still pay local, state and federal taxes, so any break they can get will free up money that can be reinvested into the business, creating breweries that are stronger financially and increase potential to grow.

As a side note, Maine brewers are subject to the 10th highest state excise tax rate at $0.35/gallon, that rolls out to about $11.20/barrel.


Thanks to the Brewers Association for providing the excise tax information from 2013.

Chad Lothian

About Chad Lothian

Chad Lothian lives in Old Town, Maine. He is a craft beer enthusiast and homebrewer. Chad has travelled to brewpubs, breweries and brewfests all over New England.