The Craft Beverage Modernization and Tax Reform Act (CBMTRA) is back in front of Congress.
The latest two bills (H.R.747 and S.236) were simultaneously re-introduced into both the House of Representatives and the U.S. Senate on Monday morning. If the Act passes, it would cut taxes on all brewers, importers, cider producers, distillers, and winemakers.
The comprehensive tax reform effort is once again backed by the Beer Institute and the Brewers Association, and contains the same craft-friendly language as previous versions put forth during the 114th Congress.
“With the beginning of the new Session of Congress, we are working hard to build support for this bipartisan legislation, which, if enacted, will help breweries all over the country generate more jobs and pour more money back into the economy,” Brewers Association CEO Bob Pease said via a statement.
As written, CBMTRA reduces the federal excise tax to $3.50 per barrel on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually. It also reduces the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and all beer importers.
Previous attempts to pass CBMTRA fell short in 2015 and 2016, but not before garnering support from 289 Republican and Democratic cosponsors in the House and 52 bipartisan cosponsors in the Senate.
Sen. Ron Wyden (D-OR), who first introduced CBMTRA in 2015, and Sen. Roy Blunt (R-MO) sponsored the latest Senate bill, which already has 11 cosponsors. The House companion bill, meanwhile, sponsored by Rep. Erik Paulsen (R-MN) and Rep. Ron Kind (D-WI), has 12 cosponsors.
In an interview with Brewbound, Pease and Beer Institute chief Jim McGreevy expressed optimism when asked about the likelihood of passing alcohol beverage tax reform during the 115th Congress, which reconvened on Jan. 3 of this year and is scheduled to meet until Jan. 3, 2019.
“Introducing our bill two weeks after Congress comes back gives us plenty of time to educate members on why we’ve created a great tax reform policy for beer,” McGreevy said.
One obstacle: about 40 cosponsors of the previous House bill are no longer in office, McGreevy said, while noting that more than 200 early supporters of CBMTRA have not yet signed onto the latest bill, either.
“I am optimistic that we can move the needle quickly,” Pease said of earning their support. “But adding cosponsors is like playing the first inning. We have to demonstrate that there is broad bipartisan and bicameral support.”
There’s solidarity in the barroom, at least: both the Wine Institute and the Distilled Spirits Council of the United States (DISCUS) have also endorsed the bill, according to Pease and McGreevy.
“Our relative associations complement each other here,” Pease told Brewbound. “We have a lot of foot soldiers. The Wine Institute and DISCUS also have relationships that a lot of small brewers don’t have.”
And as for the chances of CBMTRA passing under the new administration of President Trump, Pease described it as a “big unknown.”
“I think Trump is maybe, perhaps, categorized as anti-alcohol but pro small business,” he said. “We don’t have any good inroads to the administration.”
One potential back door might come if the BA and the BI can somehow garner support from occasional antagonist the National Beer Wholesalers Association. The NBWA, already one of the top lobbying groups in Washington, D.C., now has its own pipeline into the White House — or at least the press room — via Rebecca Spicer, the organization’s senior vice president of communications. She’s also the wife of new White House press secretary Sean Spicer.
Pease chuckled a bit at the thought of building influence that way. Regardless of familial connections, the pair said they’re optimistic.
“For the first time since I have been engaged in working on excise tax relief, we have an administration — and both chambers of Congress — talking about comprehensive tax reform,” Pease said. “The last time comprehensive tax reform was done in this country was 1986 and we have been told since we have been at this that comprehensive tax reform may be our best path forward.”
Pease added that the BA is already coordinating a number of “robust” hill climbs in April, when thousands of craft brewery owners will descend upon Washington, D.C., for the annual Craft Brewers Conference.
“A lot of things have to go right for a bill to become law,” he said. “We are going to do all that we can to demonstrate why it should become law.”