The Brewers Association reports that H.R. 494, the Small Brewer Reinvestment and Expanding Workforce Act (Small BREW Act) has been reintroduced in the House of Representatives. The bipartisan legislation, which was reintroduced by Representatives Jim Gerlach (R-Pa.) and Richard E. Neal (D-Mass.), seeks to recalibrate the federal beer excise tax that small brewers pay on every barrel of beer they produce.

Under current federal law, brewers making less than 2 million barrels annually pay $7 per barrel on the first 60,000 barrels they brew, and $18 per barrel on every barrel thereafter. The Small BREW Act would create a new rate structure that reflects the evolution of the craft brewing industry. The rate for the smallest brewers and brewpubs would be $3.50 on the first 60,000 barrels. For production between 60,001 and 2 million barrels the rate would be $16.00 per barrel. Any brewer that exceeds 2 million barrels (about 1 percent of the U.S. beer market) would begin paying the full $18 rate. Breweries with an annual production of 6 million barrels or less would qualify for these tax rates.

“Small brewers are small business owners and this bipartisan legislation would allow them to remain competitive, protect existing jobs and create new employment opportunities in communities throughout Pennsylvania and the country,” said Congressman Jim Gerlach, co-chairman of the House Small Brewers Caucus.

“There are few industries with more size disparity than the American beer business. There are 2,500 small breweries who together account for only six percent of the U.S. beer business,” said Rob Martin, president, Ipswich Ale Brewery and Massachusetts Brewers Guild. “Massachusetts Congressman Richard Neal understands the struggles craft brewers face because of this, and he has championed our effort to help level the playing field a little by supporting an equitable federal excise tax bill. He is keenly aware that craft brewers are looking to grow their small businesses and will create thousands of good jobs across the country if this legislation passes. As president of the Massachusetts Brewers Guild, I know I speak for all small brewers when I applaud Congressman Neal’s effort.”

The BA calculates adjusting the tax rate would provide small brewers with an additional $60 million per year that would be used to support significant long-term investments in tanks and other equipment and create jobs by growing their businesses on a regional or national scale. Congress has not recalibrated the excise tax on small brewers since 1976. At that time, there were about 30 small brewers. Today, there are over 2,000.

“America’s small brewers are part of a vibrant, growing industry, and really are Main Street manufacturers,” added Bob Pease, chief operating officer of the Brewers Association. “The Small BREW Act will help America’s small brewers invest in and grow their businesses—an important part of economic reinvigoration. We look forward to working with the new Congress on the passage of this legislation, which will have a positive impact on agricultural, manufacturing, hospitality and distribution jobs for the future.”

The Brewers Association has presented two United States Congressmen with the organization’s Legislator of the Year Award.

Reps. Jim Gerlach (R-Pa.) and Richard E. Neal (D-Mass.) were recognized for their stewardship of the Small Brewer Reinvestment and Expanding Workforce Act (Small BREW Act). The awards were presented at a ceremony in Washington, D.C., by Bob Pease, chief operating officer of the Brewers Association; Jim Koch, co-founder and chairman of Boston Beer Company; and Bill Covaleski, founder and brewmaster of Victory Brewing Company and president of the Brewers of Pennsylvania.

“The efforts of Congressmen Gerlach and Neal reflect their appreciation for America’s small brewers and the significant economic contributions that these men and women bring to the national economy,” said Pease. “We recognize both of these leaders for their commitment to creating a level playing field for small and independent brewers in their home states and across the country.”

The Small BREW Act, introduced by Gerlach and Neal during the 112th Congress and expected to be reintroduced this month, aims to recalibrate the federal excise tax rate structure to further foster the growth of America’s craft brewing community. Currently, brewers producing less than 2 million barrels of beer per year pay $7 per barrel on the first 60,000 barrels they brew, and $18 per barrel on every barrel thereafter. If the Small BREW Act is adopted, the rate for the smallest brewers and brewpubs would be $3.50 on the first 60,000 barrels. For production between 60,001 and 2 million barrels the rate would be $16.00 per barrel. Any brewer that exceeds 2 million barrels would begin paying the full $18 rate. Breweries with an annual production of 6 million barrels or less would qualify for these tax rates.

“Small brewers provide a significant economic spark, creating tens of thousands of jobs and generating tens of billions of dollars in economic activity each year in Pennsylvania and across America,” said Congressman Gerlach, co-chairman of the House Small Brewers Caucus. “These independent and innovative small business owners often work just as hard at improving their communities as they do perfecting their world-class products. It is a tremendous honor to be recognized by the Brewers Association for my bipartisan work in Congress to help small brewers remain competitive and continue building upon the success of America’s craft-brewing revolution.”

“I am honored that the Brewers Association has chosen me as one of their Legislators of the Year,” said Congressman Neal. “As someone who represents many small brewers in Massachusetts, this award has special meaning for me. Craft breweries are locally owned, generate economic development and create good jobs. They also make distinctive products for passionate consumers. As a supporter of the industry, I have introduced bipartisan legislation that would give small brewers a substantial tax break. My plan would recalibrate the beer excise tax for America’s craft brewers, allowing them to reinvest in their businesses. With the help of Brewers Association, I believe this initiative can be approved by the House of Representatives during this session of Congress.”