The U.S. Senate’s new tax bill would give Georgia’s small craft breweries some holiday cheer months after a watershed state law provided a major economic boon to beer makers and liquor distillers.
The would-be Christmas present comes in the form of a proposed tax decrease, which industry advocates say would put thousands of dollars into the pockets of fledgling breweries across the state.
The Senate GOP’s tax legislation, which the chamber is expected to consider as soon as next week, would cut the tax rate in half to $3.50 per barrel for the first 60,000 barrels produced by small U.S. breweries. Industry groups have been pushing for the change for years on Capitol Hill.
Joel Iverson, a co-founder of Monday Night Brewing in West Midtown, said the proposed change would save his company roughly $60,000 a year, the equivalent of hiring almost two employees.
“To me, cutting an excise tax is just putting money directly back in the pockets of people that are trying to get a business going at a time when every dollar counts,” Iverson said.
Nancy Palmer, the executive director of the Georgia Craft Brewers Guild, said she expects many local brewers to take the money saved and reinvest it into their businesses, hiring new employees and buying more space or equipment.
“Georgia has the fifth-highest excise tax rate for beer,” she said. “For brewers in Georgia, it’s an opportunity to see a little bit of tax relief from the federal government.”
The provision, which was backed by Georgia U.S. Sen. Johnny Isakson as it moved through the Senate’s tax writing committee, would also benefit wine and liquor makers. There are also more modest tax benefits in store for much larger beer makers, including Atlanta’s SweetWater Brewing Co. and Anheuser-Busch.
The language would need to pass both chambers of Congress in order to become law. And even if it is enacted, the provision would need to be renewed after two years.
Should the proposal become law, it would become the second major victory for Georgia’s growing craft beer industry this year.
A bill passed by the Legislature and signed by Gov. Nathan Deal this spring allows for local craft breweries and distilleries to sell limited amounts of beer and spirits directly to consumers for the first time since Prohibition. Georgia was one of the last states in the country to OK the practice after decades of negotiations with beer wholesalers.
The measure has been a major boon to the industry, Palmer said. Seven brewing businesses opened in the eight weeks after the bill went into effect Sept. 1, she said. Four more are expected to follow by the end of the year.
It “has had just a tremendous economic impact on Georgia,” Palmer said.
Monday Night’s Iverson said the law has helped boost sales at his brewery’s new second location in West End, which is located off a recently opened stretch of the Beltline.
Iverson said under the old system, customers would have had to buy a $12 tour package in order to have a beer.
“You want to have a place where people could pop in, grab a quick beer and jump back on their bike and keep riding,” he said. “That kind of a mentality around the beer just wasn’t possible under the old system of laws.”
There are 53 craft breweries currently operating in Georgia, according to the National Brewers Association, up from 21 in 2011. The trade group said the state ranks 49th in breweries per capita.