U.S. Sen. John Kennedy (R-La.) has signed on to a bill that will support small local breweries across Louisiana. The Craft Beverage Modernization and Tax Reform Act of 2017 will help this budding industry, which includes 28 breweries in Louisiana, by cutting their costs.
The Craft Beverage Modernization and Tax Reform Act of 2017 (S.236) seeks to grow jobs and our economy by creating a fair, equitable and comprehensive tax structure for small and independent brewers. Through the Craft Beverage Modernization and Tax Reform Act of 2017, the beer industry will be able to create an additional $320 million in economic growth. It is estimated by industry officials that more than 5,200 breweries in the United States would benefit from the passage of this bill and nearly 9,000 jobs would be added in the first 12-18 months.
“My primary focus as a U.S. senator is to retain and create jobs in Louisiana,” said Sen. Kennedy. “Louisiana has a unique culinary culture, and craft breweries are part of that from Mudbug Brewery in Thibodaux to Great Raft Brewing in Shreveport. We need to do everything possible to help our small businesses grow and thrive. As a member of the Senate Small Business Committee, I see the enormous, positive impact that small businesses have on our economy.”
“We are very grateful that Sen. Kennedy supports legislation to reduce the burdensome excise taxes that our brewery has to pay to the federal government. Just the federal excise tax we pay annually amounts to almost $200,000 for my small business and that large tax expense simply limits our growth rate, no question about it,” said Andrew Godley with Parish Brewing Co. “We already pay one of the top 10 excise tax rates in the nation here in Louisiana. By supporting the reduction of federal excise tax on small brewers, Sen. Kennedy is supporting small, local manufacturing businesses and helping our industry grow and contribute economically to the state.”
“We’ve just gone through a bit of an expansion here at Bayou Teche Brewing, and, when this tax reform passes, we’ll be able to afford to hire a few more folks to take full advantage of that new equipment we have just installed in our brewery,” said Karlos Knott with Bayou Teche Brewing. “It will also help other Louisiana breweries and will help Louisiana continue to be the vibrant and fun place that both locals and tourists frequent.”
This bill reforms the federal excise tax structure on small breweries by reducing the federal excise tax to $3.50 per barrel on the first 60,000 barrels and reducing the tax to $16 per barrel for production that exceeds 60,000 and capped off at 2 million.
It also reduces the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers.
Sen. Kennedy is a member of the Senate Bipartisan Small Brewers Caucus. Earlier this year, he recognized Red River Brewing Company as the Small Business of the Day for National Small Business Week. Red River began in a garage and became Shreveport’s first brewery in more than 100 years. Sen. Kennedy also publicly opposed state legislation that would have ended marketing agreements between public universities and breweries. These agreements are financially beneficial to Louisiana’s universities.