Sen. Susan Collins wants to help U.S. brewers brew more beer

U.S. Sen. Susan Collins wants to help the country’s small brewers brew more beer.

Apparently, U.S. Sen. Susan Collins, R-Maine, is a fan of craft beer.

She has written a bill that would reduce the excise tax small breweries must pay on each barrel they produce. U.S. Sen. Angus King, eager to demonstrate his craft beer credentials as well, has signed on as a co-sponsor.

Currently, federal law requires small brewers (defined as those that produce fewer than 2 million barrels a year) to pay an excise tax of $7 per barrel. A barrel equals roughly 31 gallons of beer. Breweries that produce more than 2 million barrels a year currently pay an excise tax of $18 per barrel.

Two million barrels is still a very large amount. Maine’s largest brewery, Shipyard Brewing Co. in Portland, produces roughly 150,000 barrels a year. The state is currently home to 36 breweries, with more in the planning stages.

The two-million-barrel threshold and tax rate for brewers has not been updated since its creation in 1976, according to a press release from Sen. Collins’ office. In that time, annual production at the country’s breweries has more than doubled, from 45 million barrels to 105 million barrels, the release said.

Sen. Collins’ bill, known as the Small BREW Act, would change the definition of small brewer to one that produces up to 6 million barrels a year, and reduce the applicable excise tax to just $3.50 on the first 60,000 barrels and $16 on additional barrels below 2 million per year.

There is also a bill of the same title in the U.S. House of Representatives.

The senator is unveiling the legislation on the eve of American Craft Beer Week, which begins on May 13.

“Maine is home to dozens of unique craft breweries and brewpubs that invigorate our economy by providing more than 1,000 jobs and drawing countless tourists into our state,” Collins said in a statement. “In meetings with brewers across Maine, they always make clear to me how federal tax policy affects their businesses. This bill, which I support, would help reduce the tax burden placed on many small brewers across our country, allowing them to thrive, create jobs, and further grow our economy.”

Not to mention, brew more beer.

Daniel Kleban, president of the Maine Brewers’ Guild and owner of Maine Beer Co. in Freeport, is an obvious supporter of the bill.

“Maine’s craft breweries are small independent family businesses, and demand for our beer is growing very quickly,” Kleban said in a statement. “Every dollar we can reinvest in our business translates directly into more Maine jobs. We are very fortunate to have representatives who are so supportive of our industry.”
This bill isn’t just about pleasing the beer geeks among us. It could have a real economic impact.
If passed, the bill would generate $153 million in economic activity throughout the country and create nearly 4,400 jobs in the first year, according to an economic impact study by John Friedman at Harvard University. That impact would grow to nearly $865 million over the first five years, according to the study.
Let’s hope the country’s politicians have the clear-headedness to put aside such issues as national defense, the deficit and health-care reform and focus on a bill that matters.
Okay, that last paragraph was a joke. But a bill that supports small businesses — especially ones that produce beer — is certainly worth taking seriously.
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Whit Richardson

About Whit Richardson

Whit Richardson is Business Editor at the Bangor Daily News. He blogs about Maine business, entrepreneurs and the economy.