Federal Tax Reform Could Mean Lower Taxes For Wisconsin Breweries

Wisconsin breweries would pay less in federal taxes if Republicans pass the U.S. Senate version of their tax overhaul.

The bill would reduce the federal excise tax on beer by $2 per barrel for the first 6 million barrels a company produces.

And small breweries would see an even bigger break. Breweries producing less than 2 million barrels a year would only pay $3.50 per barrel on their first 60,000 barrels.

“That would cover nearly every brewery in the state of Wisconsin and provide about a $5 million injection into breweries to reinvest in their communities,” said Mark Garthwaite, executive director of the Wisconsin Brewers Guild.

He said small breweries are at an economic disadvantage because the industry requires a lot of capital to get started.

“There’s a great deal of stainless steel equipment and infrastructure that goes into a brewery whether you’re small or large,” Garthwaite said. “This kind of recalibration of excise taxes will go a long way toward helping them be able to reinvest.”

Deb Carey, president of New Glarus Brewing Company, said the savings from the proposed tax breaks would be a huge benefit to her company.

“That’s easily eight or 10 jobs with benefits at a living wage. Or it also would be the same amount of money you would spend on a loan for probably $4 million of equipment or additional construction,” Carey said.

She said New Glarus and other craft breweries are an important economic driver in communities around the state.

“The economic impact in our part of the world is $60 million of revenue for southwest Wisconsin,” Carey said. “Being able to make us more liquid, have more liquid assets, does allow us to grow faster and be more competitive.”

Garthwaite of the state brewers guild said all of Wisconsin’s federal lawmakers have expressed support for the tax reduction for breweries. But the overall tax plan has been unpopular among Democrats and some Republicans.

The U.S. Senate is expected to vote on the tax plan Friday.