Lawmakers pushing legislation to relieve craft beverage industry of tax burdens

Brandon Skall, co-founder of DC Brau, says with the reduction of the excise tax, he could...
Brandon Skall, co-founder of DC Brau, says with the reduction of the excise tax, he could expand his company and hire more employees.(GRAYDC)
Published: Jun. 20, 2017 at 3:58 PM EDT

Senators in Washington are looking to relieve craft beverage companies. There is widespread support on Capitol Hill for legislation that would provide tax relief for local breweries, wineries and distilleries.

It takes a lot to make craft, liquid gold. It is a daunting endeavor, taken on by Brandon Skall and his partner Jeff Hancock, the co-founders of DC Brau.

“D.C. really needed to have this, and we wanted to be the first ones to make it happen,” said Skall.

A Washington-based craft brewery, founded in 2009, Skall says they keep expanding, but it is not always easy.

“Since day one we’ve always been battling resources,” said Skall. “Whether it’s raw ingredients, whether it’s staff and mainly because we’re growing at such a rapid rate we don’t have all the finances we need to support that at any given time.”

What could help? Skall says tax relief. Lawmakers in Washington are noticing the burden federal excise taxes have on these startups. Senator John Kennedy (R-LA) says he has 28 craft breweries in his state. He says he does not know how they have survived.

“Give these people a break for god’s sakes! They’re small. They create jobs. Many of them don’t turn a profit yet. Don’t tax them to death,” said Kennedy.

He is one of 45 co-sponsors on legislation that would lower the excise tax on the industry. Brewers like Skall say they can use the extra money to expand their business that could create more jobs. But, there are two sides to tax relief.

“The average person, they would say, ‘I want to pay less taxes.’ But that same person wants better roads, better airports, better air, better water. These are things that come at a cost,” said Thomas Cooke, a tax expert at Georgetown University.

He says excise taxes raises billions each year for the federal government. Cooke says if these craft companies use these savings to grow their business, that’s great. But, he says, that is not always the case.

“If they use it simply to put more money in their pocket and not pass the savings along to consumers, then at the end of the day who really has won? And it’s very hard to monitor that,” said Cooke.

The Craft Beverage Modernization and Tax Reform Act currently sits in the Senate Finance Committee. There is companion legislation in the House.