Tester Delivers Tax Cut for Montana Craft Alcohol Producers in Government Funding Bill

Measure will help local, independent producers create jobs and boost the economy

U.S. Senator Jon Tester delivered a shot of good news for Montana’s craft alcohol producers as a part of the deal to fund the government for the next fiscal year.

Tester secured a deal to include his bipartisan the Craft Beverage Modernization and Tax Reform Act (CBMTRA) in the year-end legislation, making permanent a cut to excise taxes on small brewers, distillers, and vintners, and speeding up the process of getting labels approved by regulators, reducing the time it takes to get a product on the shelves. The deal helps Montana breweries avoid an $800,000 tax hike next year alone.

“Montana’s craft alcohol producers make some of the finest spirits in the world – using local ingredients – and create thousands of good-paying jobs for our state,” Tester said. “Like many Main Street businesses, craft alcohol producers have been hit hard by the pandemic, and I am glad we were able to help them keep their doors open and be ready to welcome folks back for a cold drink once this pandemic is behind us.”

The CBMTRA cuts excise taxes in half for small breweries on their first 60,000 barrels of annual production, and then lowers the excise tax by two dollars for every barrel produced up to two million barrels. For small distillers, it cuts the excise tax from $13.40 to $2.70 per gallon for the first 100,000 gallons produced.

According to the Montana Brewers Association, there are more than 80 small breweries across the state that support over 2,700 jobs and produce more than six million gallons of beer each year. Montana breweries also purchase more than three million pounds of malt grain from Montana farmers and contribute over $400 million to the state’s economy each year.

“Today we raise our glasses to say cheers and thank you to Senator Tester for cosponsoring this legislation and ensuring tax relief for brewers was included in the package,” said Montana Brewers Association Executive Director Matt Leow. “The craft brewing industry is facing unprecedented challenges, from reduced taproom business and weak keg sales due to COVID-19 to aluminum can shortages and increased can prices, but today craft brewers across Montana are celebrating news that Congress will deliver on the promise of tax relief for our industry.”

“We’re so grateful for Senator Tester’s assistance on the CBMTRA,” said Courtney McKee, co-owner and CEO of Butte’s Headframe Spirits. “Small businesses like ours, across the state and country, work hard to make good jobs with living wages for our employees. This year has been hard for many small businesses and many distilleries would not have survived a 400% tax increase January 1, 2021. Headframe Spirits has nearly 30 employees and continues to grow. As a certified B Corporation, we measure our success by the positive impact we have on our community and the economic impact we have on our state. We’re proud to be a small business in Montana, adding value to Montana grown grain, and are grateful for the help to ensure we’ll be here for the long haul.”

Tester introduced the Craft Beverage Modernization and Tax Reform Act last year, and in July he urged Treasury Secretary Steven Mnuchin to defer all federal excise tax collection deadlines for domestic and imported alcohol beverages through December 31, 2020 to help producers cope with the pandemic.

 

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