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Alcohol beverage producers get tax cuts

Chico, Calif.--Brewers across the country are toasting to a provision in the new tax code that provides two years of tax cuts for alcoholic beverage producers.

Posted: Mar. 19, 2018 6:35 PM

Chico, Calif.--Brewers across the country are toasting to a provision in the new tax code that provides two years of tax cuts for alcoholic beverage producers.

The craft beverage modernization and tax reform act cuts the federal excise tax on spirits, wine, and beer.

The Secret Trail Brewing Company is one of Chico’s newest businesses.

“It's been a passion of mine for a long time to finally be a brewer and have a brewery, and it finally came true,” said Secret Trail Brewing Company owner Charlie Barrett.

He’s been brewing beer at home for about 10 years, but four months ago his dream came true.

“Yeah it was hard. It was long and hard, and at times I was wondering if it would happen and it finally did happen.”

He said it took about three years and nearly 3/4 of a million dollars to get things started. Right now it's a 15 barrel brew house.

“At this point we're producing about 40 barrels a month, so we're very small,” he said.

That means every dollar helps, which is why he's loving the new craft beverage modernization and tax reform act. Brewers have to pay an excise tax on each barrel, and that used to be $7 per barrel for small breweries.

Now that number has been slashed in half, going down to $3.50 per barrel for the first 60,000 barrels for domestic brewers producing fewer than two million barrels a year.

“It just helps us survive, helps us make it. It's just a great help for small brewers.”

For larger breweries and importers, the tax drops from $18 to $16 on the first 6 million barrels, but will stay at $18 for every barrel after that.

This is a two-year plan, so it will stay in effect through 2019.

The act also slashes the tax for distillers as well.

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