Schumer Proposes Tax Cut for NY Craft Brewers

The Small Brewer Reinvestment and Expanding Workforce (BREW) Act would cut the state’s current excise tax rate of $7 per barrel to $3.50, applying to the first 60,000 barrels brewed each year.

January 23, 2014

BUFFALO – U.S. Sen. Charles E. Schumer  (D-NY) is proposing legislation that reduces the tax for the state’s craft brewers, The Buffalo News reports.

“Small breweries throughout Buffalo, like Pearl Street Grill & Brewery, not only brew great beer, they also pour jobs into the community,” Schumer said during a recent visit to Buffalo. “By cutting taxes for these small businesses, we can help breweries buy new equipment and hire more people to boost business, and truly allow them to capitalize on the growing craft beer culture in Western New York.”

Under Schumer’s Small BREW (Brewer Reinvestment and Expanding Workforce) Act, the current excise tax rate of $7 per barrel would be cut to $3.50. It applies to the first 60,000 barrels brewed each year. It would also cut the tax by $2 on the next 1,940,000 barrels produced.

For Buffalo’s Pearl Street brewery, which produces 2,800 barrels of beer annually, the tax cut would save more than $9,800 per year in excise taxes.

“Sen. Schumer’s legislation not only gives a boost to our business, it also helps lift the entire Buffalo economy,” said Earl Ketry, the owner of Pearl Street. “Every dollar we can save in federal excise tax we can reinvest in hiring more employees and growing our business.”

Tim Herzog, owner of Buffalo’s Flying Bison Brewing Co., said the state’s small-brew industry is a capital-intensive business and any effort to trim costs is welcome.

“The equipment is expensive, employees must be specifically trained to work in a brewery, and fresh brewing ingredients can break the budget,” Herzog said. “When you add sales tax and excise tax on top of that, it’s tough to keep the doors open.”

As of last summer, New York had 131 licensed breweries throughout the state, more than 100 that are microbreweries (annual production is less than 15,000 barrels).

According to trade publication Beer Marketer’s Insights, craft beer now comprises nearly 7% of the U.S. beer market.

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