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Local brewers join fight against increasing tax rates

Andrew Hyman
Updated: December 14, 2019 11:16 PM
Created: December 14, 2019 08:03 PM

ROCHESTER N.Y. (WHEC) — New York breweries are facing a potential tax hike on beer at the end of this year, so they're turning to congress for help.

Since 2017, brewers have paid a Federal Excise Tax (FET). Currently, they operate under a recalibrated rate of $3.50 a barrel. The current rate is set to expire on Dec.31, at which point brewers would have to pay about $7.00 a barrel.

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News10NBC spoke with several local brewery representatives about what’s on the line and what’s next.

At Three Heads Brewing in Rochester, whether you go for a pint or a flight, owners say the craft beer is flowing and business is booming.

"People are still drinking beer here in Rochester, we're representing," said Co-Founder Geoff Dale.

Though just like a tasting glass, owners at Roc Brewing Co. say the craft brew business is on a smaller scale. This means every can, or tap, counts.

“It's not like the bigger guys, who can buy all that fancy equipment," said Chris Spinelli.

Operations may not be at a higher level, but with the possible tax hike on the horizon, what you pay out of pocket for that pint could be. 

“A couple dollars is a big thing, especially if you add that across one hundred thousand barrels, that's $350,000," Spinelli said.

Brewers are worried it won't just be the customer feeling the pinch in their wallets, as a rise in tax would be an obstacle in expanding a business or creating new jobs.

Spinelli says Roc Brewing plans to expand its operations, but a tax hike may put those plans on hold. Dale says the hike could hurt smaller craft breweries.

With the current rate, Spinelli estimates Roc Brewing saves $5,000 – $6,000 a year, Dale says the hike could cost Three Heads roughly $28,000 a year.

The Brewers Association of New York State has asked members of the United States Congress to pass the Craft Beverage Modernization and Tax Reform Act, a bipartisan bill introduced earlier this year.

"When you save brewers money, they reinvest, they buy more equipment and they hire people," said Executive Director of the Brewers Association Paul Leone.

In a letter to Congress, the brewers association asked for either the passage of the act or to approve an extension of the current tax rates before the deadline.  

Locally, Congressman Joe Morelle (D-25th District) says he was a supporter of the FET when he worked in the state legislature and he’s currently working with other congressional members to make a decision.

"We certainly want to make sure that not only are the businesses successful, but they expand and they hire more and more people," Morelle said.

Morelle says the fight will continue, even if the push to keep the tax low falls flat.

As for craft brewers,

"We're going to try and do everything we can to just keep going business as usual," Dale said.

Morelle says the state will continue to promote the craft brewing industry through its “Taste of New York” campaign.


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