Schumer Pushes for Bill that Would Cut Excise Tax on Small Breweries Across Upstate New York by 50%

Press Release

Today, U.S. Senator Charles E. Schumer pushed bipartisan legislation that would cut the excise tax on small breweries in half, helping brewers like Cooperstown Brewing Company in Milford reinvest in their business, hire new employees, and revitalize downtown communities. Currently, brewers pay a $7 excise tax for the first 60,000 barrels they brew per year. Under this bill, that rate is slashed to $3.50 per barrel, resulting in potential savings of $210,000 per year for an eligible brewery. The bill also cuts the tax by $2 on the next 1,940,000 barrels produced, resulting in potential savings of up to $3,880,000 each year. This totals over $4 million in potential annual savings for brewers that produce up to 2 million barrels per year. Allowing small breweries to reinvest in their companies is good for the surrounding communities, as many build state-of-the-art structures or renovate existing buildings, preventing blight and creating good-paying jobs.

Standing at Cooperstown Brewing Company in Milford, Schumer pushed the legislation alongside Cooperstown Brewing Company owner Stan Hall and brewery employees.

"Small breweries throughout Upstate New York not only brew great beer, they also create great jobs," Schumer said. "By cutting taxes for these small businesses, we can help grow the economy and put even more New Yorkers back to work in stable, good-paying jobs. Breweries are the crown jewels of so many of our communities, and many of them have renovated charming old warehouses in downtowns across the state. Putting more money back into these businesses will be good for economic development, good for jobs, and good for New York."

Any brewery that brews fewer than 6 million barrels of beer per year is eligible for the tax cut that will allow brewers to reinvest in workers, new equipment and new space as they expand their business. According to the Brewers Association, this tax cut would have saved small brewing companies over $13 million nationwide in 2008.

Microbreweries would have saved nearly $3 million, and brewpubs would have saved nearly $2 million just on the initial 60,000 barrel tax cut for that same year. When the tax break for the additional 1,940,000 barrels is factored in, small breweries throughout the country would have saved over $26 million in 2008, on top of the tax savings from the first 60,000 barrels produced. That represents nearly $40 million dollars in tax savings for an industry that employs New Yorkers throughout the state.

Senator Schumer joined Senator John Kerry (D-MA) and colleagues on both sides of the aisle in support of the BEER Act.

The approximately 650 small breweries across the country combine to employ nearly 100,000 American workers. In New York, the beer industry directly supports approximately 8,000 jobs through brewing and distribution, and nearly 60,000 jobs overall when retail sales are factored in. These jobs paid nearly $1.7 billion in wages in 2008, and accounted for almost $5 billion in economic activity. A Harvard study of the proposal predicts that passage of the proposal would increase economic activity in the small brewery sector by over $115 million in the first year, and by over $733 million over the first five years. Every dollar saved by cutting the excise tax would result in nearly $11 dollars in economic activity, providing an immediate and substantial boost to the economy. According to the study, the proposal would generate over 2,700 new jobs in the first year, and an additional 375 jobs per year for the next four years.

The Cooperstown Brewing Company, founded in 1994, is known for its homemade beers including the Old Slugger, Nine Man, Benchwarmer, Strike Out, Back Yard and Pride of Milford. Cooperstown once had two English-style breweries in town, and following that tradition, the Cooperstown Brewing Company brews premium ales, porters, and stouts using the finest two-row English barley malts, West Coast hops and the English Ringwood Yeast. The brewery produces 30,000 to 40,000 barrels of beer per year, and has 7 employees.

Source