Federal beer proposals would help Aspen brewer

It appears that there is an issue on which congressional Republicans and Democrats can agree: Beer is overtaxed.

Bills that seek to lower the federal excise tax on each barrel of beer produced by brewers large and small are awaiting discussion in House and Senate fiscal committees. Authors and co-sponsors of the competing bills tout their bipartisan support and the relief they would bring to small brewers such as Aspen Brewing Co.

There is the Small Brew Act (House Resolution 494 and its companion, Senate Bill 917), endorsed by the Boulder-based Brewers Association, which represents small- and medium-sized craft brewers in Colorado and across the United States. It seeks to reduce the tax on each barrel from $7 to $3.50 but only on the first 60,000 barrels produced within a year. Companies that produce more than 60,000 barrels but fewer than 2 million barrels would pay a $16 rate.

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The Small Brew Act would provide no tax relief to the behemoth brewers that produce more than 6 million barrels, such as Anheuser-Busch InBev and MillerCoors, which currently pay $18 per barrel.

A barrel is the equivalent of two full-sized kegs. Aspen Brewing Co., which in December 2011 opened a new brewing facility in the Aspen Business Center, produced about 2,000 barrels last year and has ramped up production to more than 4,000 barrels this year.

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Duncan Clauss, owner of the local beer manufacturer, said he supports the Small Brew Act even though competing legislation, known as the Beer Act, would provide greater tax relief. Under the Beer Act (HR 1918 and SB 958), brewers of 15,000 barrels or fewer would pay no federal excise tax.

“The Beer Act seemingly helps us, but it gives more momentum to the international brewing companies,” Clauss said. “It could have more potential to hurt us in the long run, despite us being able to save a few bucks per barrel in the short term.”

That’s because the Beer Act cuts in half the tax that brewers of more than 2 million barrels pay per barrel — from $18 to $9.

The Brewers Association estimates, based on 2012 data, that the Beer Act’s 10-year cost to the government would be $16.76 billion. Comparatively, the Small Brew Act would reduce government revenue by only $651.9 million over a decade.

Clauss said either act would mean savings for his company, though, allowing him to expand and hire more workers. In addition to his manufacturing facility, he also operates a tasting room for his various varieties of beer at a second-floor pub on East Hopkins Avenue.

“The little money that we would save on excise tax essentially would give us more opportunity to invest in the business,” Clauss said. “We could grow our business a little bit faster.”

Sen. Mark Udall, D-Colo., is the lead sponsor of SB 958, the Senate version of the Beer Act. In a news release last week, he said it would result in 90 percent of Colorado’s licensed breweries paying no federal excise taxes.

“Colorado is one of the top beer-producing states in the country, and our innovative brewers have rightly earned Colorado a reputation as the Napa Valley of beer,” he said. “These aren’t your dad’s beers, and we shouldn’t discourage brewers from growing their businesses with an outdated excise tax.”

Co-sponsors of Udall’s bill include Republican Sens. Roy Blunt, of Missouri, and David Vitter, of Louisiana, as well as Colorado’s junior senator, Democrat Michael Bennet. Two other Senate Democrats have joined as co-sponsors.

The lead sponsor of the House version of the Small Brew Act is Rep. Jim Gerlach, R-Pa. His resolution has 47 Republicans and 43 Democrats as co-sponsors.

Brewers Association Chief Operating Officer Bob Pease said both bills would help small brewers, but the Small Brew Act has a better chance of passing because it wouldn’t strip the U.S. government of as much excise-tax revenue.

“The Beer Act is not serious,” Pease said. “That’s why we support the Small Brew Act, because we think we can get it passed at a modest cost, and it would help the brewery in Aspen to reinvest and expand and maybe hire an additional worker or two.”