Capito, McKinley co-sponsor craft beer act

United States Senator Shelly Moore Capito (R-W. Va.) has joined U.S. Rep. David McKinley (R-W. Va.) as co-sponsors of the Craft Beverage Modernization and Tax Reform Act (CBMTRA), the Brewers Association has announced.

Senator Capito is among the first 15 senators to sign on as a co-sponsor of the bill (S. 1562). In the House, 74 congressmen from 32 states have so far signed on as co-sponsors (H.R.  2903). Identical CBMTRA bills have been introduced in the Senate and House.

Brilliant Stream commends Senator Capito and Representative McKinley for being among the first in Congress to co-sponsor the bills. You make West Virginia craft beer lovers proud.

Laska’s meetings prompted actions

Back in early June, Wil Laska of Greenbrier Valley Brewing Company joined the Brewers Association Hill Climb and held meetings with members of West Virginia’s congressional delegation and their staffs to seek support for small brewery initiatives. Capito was one of those who took the time to meet personally with Laska, and she expressed an interest in the small brewer’s legislation at that time.

Brilliant Stream wrote about these meetings (link to article). It’s great to see the efforts of West Virginia brewers rewarded with two co-sponsors. Shortly after Laska’s meetings the small brewers and the macro-brewers got together and combined their two separate bills into the CMBTRA, which both strongly endorse.

CBMTRA a broad industry initiative

On June 11, 2015, S.1562, the Craft Beverage Modernization and Tax Reform Act of 2015, was introduced in the U.S. Senate. On June 30, 2015, identical legislation, H.R. 2903, was introduced in the U.S. House of Representatives.

The CMBTRA is broad legislation that impacts not just the beer industry, but also cider, wine and distilled spirits. In regards to beer, the bill restructures the federal excise tax, simplifies the bonding and filing requirements for 90% of America’s craft breweries, modernizes the Alcohol Tax and Trade Bureau (TTB) labeling requirements and eases certain restrictions on transferring beer between bonded facilities.

Bill would halve tax rate for small brewers

Currently, a small brewer that produces less than 2 million barrels of beer per year must pay $7.00 per barrel in federal excise tax on the first 60,000 barrels produced each year. Almost all craft breweries today fall into that 60,000 barrels/year category. Adjusting this rate to $3.50 per barrel would provide approximately $37.5 million per year (based on 2014 data) to help strengthen those brewers and support their efforts to maintain and generate jobs.

Larger breweries would benefit too

Once production exceeds 60,000 barrels, a small brewer must pay the same $18 per barrel excise tax rate that the largest brewer pays at 97 million barrels. The Brewers Association reports that adjusting the tax rate to $16 per barrel on beer production above 60,000 barrels up to 6 million barrels would provide small brewers with an additional $36 million per year (based on 2014 data) that would be used to support significant long-term investments and create jobs by growing their businesses on a regional or national scale. Foreign based breweries would also benefit from this reduction.

In addition the Craft Beverage Modernization and Tax Reform Act would:

• Exempt brewers who pay less than $50,000 in federal excise taxes from bi-weekly filing and bonding requirements.
• Allow for consolidated bookkeeping for brew pubs.
• Expand the list of ingredients that could be automatically included in a beer without approval from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
• Allow brewers to collaborate on new beers by giving them the flexibility to transfer beer between breweries without tax liability.

This is a good initiative, that if adopted, would put more money back into the small towns and mains streets of West Virginia and all of Appalachia. It’s something all craft beer fans should get behind.