Craft Beer: The Tax Break We Can All Agree On

Laura Wasson, Dickinson Law Firm, Iowa Tax Law, Iowa Start-up group, Des Moines Iowa

Posted on 12/21/2017 at 12:00 AM by Laura Wasson

If you haven’t had time to wade through the 503 page tax bill in search of tax cuts that benefit you, I’ll save you some time: the bill cuts taxes for craft breweries. Though the cuts are only drafted to last two years, they could be extended. This means one thing for our brewing friends: more money, more beer.

Technically, the tax legislation helps all beer producers, but it is specifically targeted to help small breweries expand. For instance, Congress’ Joint Committee on Taxation estimated that alcohol producers would save $4.2 billion from 2018 – 2019 under the bill. The largest brewers, like Anheuser-Busch, are estimated to make up only $12 million of those cuts. The real beneficiaries are the small businesses: the bill cuts the federal excise tax from $7 to $3.50 per barrel on the first 60,000 barrels for any brewer that produces 2 million or less barrels a year. The excise tax only decreases from $18 to $16 per barrel for the first 6 million barrels for all other brewers.

For Iowan’s, this tax cut will have a real impact close to home. According to the Brewer’s Association, an association for small and independent craft brewers, Iowa was home to 70 craft breweries as of 2016. Those brewers produced a combined 61,232 barrels. That puts Iowa in 14th place in the U.S. for breweries per capita, with 3.2 breweries per 100,000 adults. That’s a steady increase since 2011, when Iowa only had 27 craft breweries. These statistics indicate that most, if not all, small Iowa craft breweries stand to directly benefit from the tax bill, with decreased costs hopefully leading to increased production. This will not only have a positive impact on happy hours, it will stimulate the already significant impact craft breweries have on the Iowa economy, which in 2016 was an estimated $861 million.

That’s something we can all get behind.

If you’re a small business or brewery looking for assistance with corporate matters, contact Laura Wasson.

The material in these presentations is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.The opinions expressed in these videos are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

- Laura Wasson


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