A reduction in excise taxes for U.S. brewers is set to expire at the end of the year, leading Louisiana brewers to brace for a spike in their taxes.
Two years ago, as part of the Tax and Jobs Act of 2017, Congress passed the Craft Beverage Modernization and Tax Reform Act, which cut brewers’ excise taxes in half for the first 60,000 barrels, saving the industry an estimated $80 million each year.
It’s a cut that’s benefitted every brewery in Louisiana, says Cary Koch, executive director of the Louisiana Craft Brewers Guild. Of the 38 operating breweries in Louisiana, only Abita Brewing Company produces more than 60,000 barrels.
“It seems with impeachment hearings it’s been difficult to have the message be heard,” Koch says. “This is something that would really hurt our industry. A lot of brewers in Louisiana used the savings to reinvest in their equipment. Some launched 401(k) plans or were able to underwrite health benefits for employees.”
It’s especially a concern for the industry because many breweries already operate on “razor-thin margins,” says Koch. There are six breweries that have opened in state over the past two years that would be subject to the full tax for the first time.
There are currently two breweries operating in Baton Rouge—Tin Roof Brewing Co. and Southern Craft Brewing Co.—and several more are under development. Rally Cap Brewing Company, led by former L’Auberge Vice President of Casino Operations Kevin Whalen, will hold a soft opening at its Industriplex brewery later this month.
