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US House Committee Expected to Extend Brewers Tax Relief

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An effort to maintain reduced federal excise taxes (FET) on all brewers an importers could take a major step forward tonight.

The House Ways and Means Committee is expected to extend tax cuts for alcohol producers and importers as part of the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (H.R. 3301) extender bill.

Although the committee’s version of tax relief would only extend through the end of 2020, alcohol industry trade groups say they plan to continue efforts to make the tax cuts permanent.

“This doesn’t mean that permanence is off the table,” Beer Institute president and CEO Jim McGreevy told Brewbound, adding that inclusion in the extender bill would be a building block.

Indeed, the 2019 version of the Craft Beverage Modernization and Tax Relief Act (CBMTRA) has already garnered majority support in both the House (229 supporters) and Senate (65 supporters). Of the 42 members on the House Ways and Means Committee, 29 representatives — including the bill’s co-sponsor, Rep. Ron Kind (D-WI) — have pledged their support.

If language from CBMTRA is included in the finalized version of the tax extender bill, it would mark a significant development in the effort to extend current tax breaks for brewers, which are slated to expire at the end of 2019. The 2017 version of CBMTRA moved through the U.S. Senate before ultimately being rolled into the Tax Cuts & Jobs Act, which President Donald Trump signed into law in December 2017.

Nevertheless, CBMTRA’s expected inclusion in the package of tax extenders is one step in a long legislative process. The measure would then advance to the House floor. According to McGreevy, lawmakers have not signaled whether they would take up the measure before Congress goes into recess in August.

The extender would keep in place through December 31, 2020, an excise tax rate of $3.50 per barrel (a reduction from $7 per barrel) on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually. The legislation also sets the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and beer importers, while maintaining the $18 per barrel excise tax for brewers producing more than 6 million barrels.

If the House passes the bill, the legislation would move to the Senate, which has its own version of the bill (S. 362). McGreevy said it’s unclear how the Senate would react, and if lawmakers in that chamber would push for permanence or a longer extension.

The Brewers Association, the Colorado-based trade group supporting over 7,000 small and independent breweries, also supports the bill also plans to continue working alongside the BI to advance the legislation.

“Having the FET recalibration language included in H.R. 3301 is a positive step forward,” BA federal affairs manager Katie Marisic wrote on the organization’s blog. “Since the FET recalibration went into effect, the BA has advocated for its extension or permanence, and will continue to do so through its support for the Craft Beverage Modernization and Tax Reform Act of 2019, bipartisan legislation that is backed by more than half of the U.S. Congress, which would make the FET recalibration permanent.”

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