Updated: October 7, 2011

Legislation has now been introduced in both chambers of Congress seeking to enact a graduated beer excise tax rate of $3.50 and $16.00 for America's small brewers.  H.R. 1236 was introduced on March 29 by U.S. Representatives Jim Gerlach (PA-6) and Richard E. Neal (MA-2), with Representatives Erik Paulsen-(MN-3), Earl Blumenauer (OR-3), Peter DeFazio (OR-4) and Duncan Hunter (CA-52) joining as original co-sponsors of the bill.

On March 9, U.S. Senators John Kerry (D-Massachusetts) and Mike Crapo (R-Idaho) introduced S. 534 and were joined by 17 of their Senate colleagues who signed on as original co-sponsors.

U.S. Senate and House Bills

Specifically, H.R. 1236 and S. 534 seek to reduce the small brewer rate on the first 60,000 barrels by 50 percent (from $7.00 to $3.50/barrel) and institute a new rate of $16.00 per barrel on beer production above 60,000 barrels up to 2 million barrels. Breweries with an annual production of 6 million barrels or less would qualify for these tax rates. H.R. 1236 and S. 534 mirror the provisions contained in last session’s H.R. 4278 (which gained the support of 133 U.S. Representatives) and S. 3339 (which gained the support of 28 U.S. Senators).

Senate Bill S. 534 (introduced March 9, 2011)

• S. 534

House of Representatives Bill H.R. 1236 (introduced March 29, 2011)

• H.R. 1236

Additional Information

• Recalibrating the beer excise tax rate paid by smaller brewers is the top legislative priority for Brewers Association members.
  • In the fall of 2009, in response to a request by Representative Neal, the Brewers Association participated in the development of H.R. 4278, a proposal to create a graduated excise tax rate for small brewers.
  • Leslie and Mark Henderson of Lazy Magnolia Brewing Co. in Kiln, Mississippi produced a video which explains how an excise tax reduction would benefit their brewery and employees. The video was played at the December 2009 meeting of the House Small Brewers Caucus. It is essentially a case study of the beneficial impact of the proposed $3.50/barrel small brewer rate, and we encourage members to view the 4+ minute clip and apply the points Leslie makes to your own businesses.