Tester proposes tax cut for small breweries

Christopher Doering

by Great Falls Tribune

WASHINGTON – In a legislative toast to small breweries across the country, Sen. Jon Tester announced plans this weekend to give such establishments a tax cut.

The Montana Democrat said he will sponsor the Small BREW Act that would lower the excise tax for small brewers by $3.50 – from $7 to $3.50 – per barrel for the first 60,000 barrels produced each year and by $2 per barrel between 60,000 and 2 million.

Tester made the announcement Saturday after touring the Triple Dog Brewing Co. in Havre. There are more than 50 licensed breweries in Montana using more than 3 million pounds of malted grain from local farmers. As of last year, no brewery in Montana had produced more than 60,000 barrels a year.

“The folks running small breweries are adding value to local agriculture products and creating jobs in towns across our state,” Tester said. “Cutting taxes for Montana’s breweries will help these businesses grow, reinvest in their communities and allow them to continue producing the nation’s best beer.”

The bill has 31 co-sponsors, including 23 Democrats, six Republicans and two independents. Prior attempts to enact the bill have stalled in Congress.

Seth Swingley, owner of Mighty Mo Brewing in Great Falls, said his business could save as much as $3,000 a year if the Tester bill is enacted. The brewery, which opened in December 2013, expects to produce about 1,100 barrels of beer this year, including its Rising Trout Pale Ale, Smoke Jumper Strong Scotch Ale and Lip Ripper India Pale Ale.

“The savings it will give us will allow us to reinvest in more equipment or possibly giving employees raises or benefits,” Swingley said. “There is a lot of stuff you can do with a few thousand dollars.”

Montana is one of the most popular beer producing states. The state had 5.3 breweries for every 100,000 people 21 or older in 2013, ranking it third behind Oregon and Vermont, according to the most recent data from the Brewers Association. The trade group said Montana breweries produced 133,465 barrels of craft beer in 2013, or about 5.6 gallons per drinking adult.