Last week, I posted about beer tax issues and how the federal government and California were approaching the sticky tax issues in this weakened economy. The main point in that post was the necessity of finding that sweet spot between raising taxes to cover necessities and preventing the tax burden from becoming so hefty that it is not sustainable. Now this isn’t a political blog. I can guarantee you that the contributing bloggers here do not see eye to eye on a number of political issues. That being said, we are a news blog and pending legislation is news. Although the federal government is proposing in reducing the excise tax for small brewers, the state of Washington is proposing to raise taxes on larger breweries as part of a discretionary tax package that includes raising taxes on bottled water, soda, candy, gum and beer, in addition to increasing the general sales tax. These taxes are generally called “sin taxes” and are meant to shift the tax burden to sales that are detrimental to health and well being or “luxury item taxes” that shift the burden to portions of the population that can afford these items.
The concern being raised by Heather McClung, President of the Washington Brewers’ Guild is that if beer continues to be targeted it will no longer be sustainable and will force breweries to close. Heather, along with others, are also concerned about how beer is being singled out for this tax but wine and other spirits are not. Here is a link to a pdf on the current state of beer taxation in the state of Washington.
If this concerns you as well, the Washington Brewers’ Guild asks that you find the contact information for your legislator and voice those concerns.
Here is a sample letter provided by the Washington Brewers’ Guild
I was saddened and dismayed to learn that the Senate included a beer specific tax to help raise revenue in the Senate Revenue proposal.
Even though it provides an exemption for the small breweries (thank you) we still oppose this legislation as it does not address the root issue of beer being singled out as a “sin” tax. This proposal practically doubles the tax burden. It raises the tax from $8.08 to $15.50 per barrel. That is a significant hit to any industry. This situation creates a dangerous precedent. If we roll over on this and don’t oppose it or stay neutral, then it will only be that much easier for legislators to choose beer as an easy target whenever they need to raise a little extra revenue. It is also interesting to note that only beer is mentioned. If beer was targeted because it contains alcohol, why were wine and spirits excluded? Why single out a specific industry and one of the only industries adding jobs in the state?
Why beer? This question is often asked at our Guild meetings and is the subject we bring up every January when our industry visits the legislature. Why does our industry get unfairly sought after to raise money to fill government coffers. Alcohol companies already pay more taxes than most other goods manufacturing industry in the country. Currently in Washington D.C. the house and senate have bills to LOWER excise taxes on beer to stimulate our industry and our related industries! It is concerning that the opposite, adversarial approach is threatened in our home state- the state which grows 75% of the country’s hops!
Beer has taken its fair share of the punches over the last few years with DRAMATIC cost of goods increases. There is only so far that we can be pushed before breweries start going out of business from restricted profit margins. If the other alcohol industries gain a larger price advantage, then more consumers will choose the affordable option instead of the quality choice. We promote microbrew as a sustainable, local option and are actively trying to change beer’s reputation to a beverage to be paired with food that is intensely full of flavor and body.
A well known blogger in our industry, Jay Brooks from California had a nicely written piece on his blog the other day concerning beer tax proposals in California. Much of what is discussed concerning California is true of Washington. I think you and your colleagues may be interested. The link is here:
Please do not support the beer tax and please encourage your fellow legislators to also not support a tax on beer. A tax only hurts our growing craft beer industry.
Thank you for your time and consideration.