Thanks to GOP Tax Cuts, Craft Beverage Producers are Hiring and Expanding


Posted by John Kartch on Friday, December 6th, 2019, 5:00 AM PERMALINK

Thanks to GOP tax cuts, craft beverage producers are hiring new employees, purchasing new equipment, and expanding production
 

Thanks to the Tax Cuts & Jobs Act enacted by congressional Republicans and President Trump, local breweries, distilleries, and wineries across America are hiring more employees, purchasing new equipment, and expanding production. This means local craft beverage entrepreneurs are able to grow their business and provide a greater variety of beverages and fun community gathering places.

The GOP tax cuts enacted the Craft Beverage Modernization and Tax Reform Act, which provided federal tax relief for local craft breweries, wineries, and distilleries. And the tax cuts included full business expensing, which allows companies to deduct the full cost of new equipment from their taxes the same year they purchase it.

Below are several examples of good news from breweries, wineries, and distilleries. (If you know of any additions to this list, please send to jkartch@atr.org)

Alexander Valley Vineyards (Healdsburg, California) – The vineyard was able to create new jobs, buy new equipment, and remodel their tasting rooms because of the Tax Cuts and Jobs Act:

“The craft beverage bill has been an incredible boost for our industry and this extension allows us to continue investing in our wineries by buying new equipment, remodeling tasting rooms, hiring new employees and more,” said Hank Wetzel, founder and family partner of Alexander Valley Vineyards and Chairman of Wine Institute. “All of this benefits local communities in the form of jobs, tax revenue and support for the hospitality industry.” – Dec. 20, 2019, Southeast Farm Press article.

Alter Ego Cider (Portland, Oregon) – The Tax Cuts and Jobs Act allowed the company to invest in the business and hire more people:

Anne Hubatch, co-owner of Alter Ego Cider and VP of the Northwest Cider Association, said “The [CBMTRA] has made real and lasting impacts to my small business. As a micro-craft cidery, this act helps us to save on our excise taxes which in turn keep more money in the business to grow and invest in more staff and equipment." – Feb. 13, 2019, BeverageDaily article.

Biscayne Bay Craft Brewery (Miami, Florida) – Hiring two new employees and purchasing new equipment:

Consider the story of Jose Mallea, owner of Biscayne Bay Craft Brewery, who participated in President Trump's event. The tax cuts have allowed him to purchase $100,000 more in equipment and hire two new employees. – April 29, 2018 Tallahassee Democrat article excerpt

 

Bar Cento (Cleveland, Ohio) – The tax cuts allowed the bar to add new jobs and invest more in their facility:

Sam McNulty, co-founder of multiple Cleveland brewery/restaurants including Market Garden Brewery and Bar Cento, credited the tax break with helping his operations expand at an accelerated rate, "which in our case meant several million dollars of investment in our facility as well as the creation of a large number of full-time positions."

Not having certainty for the tax cut beyond next year could stymie other, more long-term investments.

"As in life, so it goes in business, where if the future is uncertain, you are more likely to be less secure and optimistic and thus more conservative and frugal," McNulty said. "There's not a bank on the planet that will finance a business that has only a one-year lease. And so a one-year extension is appreciated, but it is not enough to really fuel this growing industry and reach the full promise of the economic benefits of local craft beer." – Dec. 17, 2018, Crains Cleveland article.

Brian's Electric (Stratford, Wisconsin) – The Tax Cuts and Jobs Act allowed the company to increase wages:

Jacobs told Budget & Tax News he has passed the benefits of TCJA along to his employees,

“I gave out, when you add it all up, about $150 an hour worth of wage increases,” Jacobs said. “Depending on how they have their taxes taken out of their checks, the lowest was around $14 a week in net take home pay, all the way up to $65 in net take home pay.” – Sept. 12, 2018, Heartland Institute article.

Cedar Springs Brewing Company (Cedar Springs, Michigan) -- Used savings from the Tax Cuts and Jobs Act to hire new employees and purchase new equipment:

Across the nation, craft beer makers are urging Congress to pass the Craft Beverage Modernization and Tax Reform Act.

The current legislation gives small brewers a 50% reduction of their federal excise tax, but it expires at the end of 2019.

"It was relief for a lot of us," Cedar Springs Brewing Company's Dave Ringler said. "I can speak personally, that gave us a little cash flow ease. It was something we used to hire employees, buy new equipment. It definitely helped out."

The new act would make that tax cut permanent.

"We’re all little guys," Ringler added. "Almost all of us are entrepreneurs that are sole proprietors or small business people, so it really does help Main Street."

"Small breweries really are the lifeblood of small communities," Ringler added. "It's been a huge part of revitalization in communities not only here in Michigan but nationally." -- Oct. 10, 2019 Fox 17 Article

Central Standard Distillery (Milwaukee, Wisconsin) – The Tax Cuts and Jobs Act allowed the distillery to hire four new employees, invest in a new facility, and ordered a new bottling line:

Central Standard Distillery co-owner Evan Hughes said his business was able to grow faster than it normally would because of the act. He attributes four key growth areas to the success of the act, including: Central Standard hired four new employees, bringing staff totals to 22 people. The company invested in a 15,000-square-foot facility on Clybourn Street. In addition, Central Standard ordered a new bottling line for improved efficiency and offered health care to all of its employees.

"It gave us the courage to expand our business quicker than we normally would," Hughes said. – Dec. 10, 2019, Milwaukee Business Journal.

Clayton Distillery (Clayton, New York) - facility upgrades:

Mr. Aubertine, who co-owns the Clayton Distillery, pays about $40,500 in excise taxes annually for the 3,000 gallons of spirits he produces at $13.50 per proof gallon. The tax reform, however, will reduce his expense to about $8,100 when it takes effect in 2018, which encouraged him to install upgrades to his facility at 40164 Route 12.

“We’re basically investing back into the business,” he said. “The tax plan — it also lets us write off some of the supplies a little bit differently.” - December 28, 2018, Watertown Daily Times article excerpt

Crane Brewing Company (Raytown, Missouri) – The Tax Cuts and Jobs Act allowed the brewery to create new jobs:

The beer is flowing in Raytown at Crane Brewing Company. Business is good now, vice president and co-founder Chris Meyers said. 

He credits the expansion of his business in part to the Tax Cuts and Jobs Act of 2017, he Meyers said substantially cut federal excise taxes on America's brewers.

"For us, we’ve been able to add a canning line. We’ve been able to add some more staff here to kind of grow,” he explained. “At this point, there’s over 100 breweries in Missouri. Almost 10,000 people employed by the industry. Over a billion dollars in revenue to the state."

The brewer said he believes the legislation helped spur small business growth.

“By cutting these excise taxes in half, it’s really let us move forward, produce more product, get more sales, and actually increase the revenue available to everyone," Meyers told KCTV5 News. – Dec. 6, 2019, KCTV 5 News.

Crooked Tooth Brewery (Tucson, Arizona) – Because of the Tax Cuts and Jobs Act, the brewery is planning to invest in new jobs and  has been able to give back to the community:

The Vernons have been in the brewery business for about three years. Most of that time has fallen under the Craft Beverage Modernization Tax Reform Act passed in 2017. Because of this, they pay $3.50 a barrel in taxes, but at the start of 2020 that could double.

“We had about two months of business where we had $7 a barrel,” Vernon said. “That two months of business we didn’t do a lot of brewing, you know.”

This tax break was like a glass half full for small business.

Like the glass, there was plenty of room to grow. But if it expires, there's fear that optimism goes down the drain.

“Something that we may be investing in employment or we also give a lot to the community,” Vernon said.

These are things Vernon said he's been able to do because of this tax break, like working with local nonprofits on events. – Dec. 7, 2019, KLOD article.

Diamond Bear Brewery (Little Rock, Arkansas) – The brewery saved over $10,000 because of the Tax Cuts and Jobs Act and invested it in employees and equipment:

Russ Melton, president of Diamond Bear Brewing, said the Craft Beverage Modernization and Tax Reform Act is a big relief for his business.

"It lowered it from $7 per barrel which is 31 gallons to $3.50 a barrel," he said.

He said it's allowed him to save thousands every year.

"Doesn't sound like a lot but if you do 3,000 barrels that's $10,000," Melton said.

That's 10-thousand dollars that can be used on employees or equipment.

"It is a big help for small businesses," he said. – Dec. 18, 2019, THV11 article.

Dripping Springs Distilling (Dripping Springs, Texas) -- The owner says he was able to use savings from the Tax Cuts and Jobs Act to hire new employees, invest in new equipment, and break ground on a new visitors center:

These tax savings have enabled Texas craft distillers to expand our businesses by hiring more employees, investing in new equipment and purchasing more from Texas agricultural suppliers. At Dripping Springs Distilling, which I co-founded, in addition to creating new jobs, we were able to break ground on a new visitors center, where we hosted 15,000 visitors last year.

 Gary Kelleher is co-founder of Dripping Springs Distilling. -- Nov. 29, 2019 My San Antonio

Dry Fly Distilling (Spokane, Washington) - Hiring new employees, plant expansion, and facility investments:

The reform that went into effect January 1, 2018 is helping Dry Fly Distilling save some money that the company is using to pump right back into a planned expansion, special projects, and other additions.

The Craft Beverage Modernization and Tax Reform Act reduced the federal excise tax on distilled spirits producers. Dry Fly Distilling owner Don Poffenroth said the change has saved Dry Fly about $1.50 on every bottle, which cuts down production costs.

"Now that $1.50 really is allowing us to add additional personnel, to put more money back into our plant and then we are embarking on a fairly aggressive expansion plan as well. So, we are going to build a new facility. So, we are 100% reinvesting kind of everything we get out of that," Poffenroth said.

That saved money also can go toward special projects, like the Dry Fly Single Malt Whiskey, which has been aged for the last ten years. - February 16, 2018, KXLY article excerpt

Dynalab Inc. (Reynoldsburg, Ohio) – Because of the Tax Cuts and Jobs Act, the company was able to invest in new manufacturing equipment, employees received a bonus as well as a larger take home pay:

On a recent trip to Ohio, President Donald Trump proclaimed: “America is once again open for business.” Evidence for that statement? The Tax Cuts and Jobs Act of 2017.

As the president and chief executive officer of Dynalab Inc., a small-business manufacturer of electronic products in central Ohio, I can say that we already see many benefits provided by the corporate and personal tax-rate reductions of the 2017 act:

• Larger 2017 year-end bonuses and greater take-home pay for most of our associates.

• $2 million-plus in new manufacturing equipment.

Although final regulations have not been released, and more needs to be done to rein in the Internal Revenue Service, our country’s economy is benefiting. The growth in gross domestic product, jobs creation and the stock market tell the tale.

Gary James
Reynoldsburg  
– March 22, 2018, Columbus Dispatch article.

Flying Dog Brewery (Frederick, Maryland) - purchasing new equipment:
 

It's a similar story for Maryland's Flying Dog Brewery. CEO Jim Caruso (who is a donor to the Reason Foundation, which publishes this website) says the tax cuts might not look like much at the consumer level, but they free up a lot of money for businesses to reinvest in their operations.
 

"When you look at this reduction in taxes. That translates to a penny per bottle. It's a small cost per bottle times the number of cases, that adds up pretty quickly," says Caruso, saying his company saved some $300,000 thanks to the tax cuts, which he says has gone toward buying new capital equipment. - November 21, 2018 article excerpt from Reason Hit & Run Blog excerpt

 

Garrison Brothers Distillery (Hye, Texas) – The brewery was able to hire more employees and increase their production because of the Tax Cuts and Jobs Act:

Starting a liquor distillery in the United States is expensive. Take it from Dan Garrison, who runs Garrison Brothers Distillery in Hye, roughly an hour west of Austin. He estimated in November that it costs about $7 million to get a whiskey distillery up and running — between stills, fermentation tanks, grain silos and other operational costs.

Garrison said Garrison Brothers paid an excise tax of $13.50 per proof gallon from the time he started his business in 2006 until 2017, when the tax break took effect. After that the tax was reduced to $2.70 per proof gallon — 80% less — which Garrison said put spirits on par with what wine and beer producers were paying.

As a result, “I could do things I could only dream of doing,” Garrison said.

Since 2017, Garrison Brothers has grown from 11 to 45 employees and tripled the amount of cases it produces annually, projecting to top 9,000 this year. – Dec. 17, 2019, Austin Business Journal.

Ghostface Brewing (Mooresville, North Carolina) – Hiring new employees, purchasing more equipment, and increasing distribution:

Mike Cuddy, owner of Ghostface Brewing in Mooresville, N.C., said his company also used the tax break to buy more equipment, hire more people and focus on distribution to local grocery stores and restaurants. – April 26, 2018, MarketWatch article excerpt

Grand Rounds Brewing Co. (Rochester, Minnesota) – Because of the Tax Cuts and Jobs Act, the brewery was able to hire a new employee as well as invest in research and development:

“We are really a true industry that’s growing in the state of Minnesota, not only across the country, but Minnesota’s really got a lot of craft brewers,” said Tessa Leung, CEO of Grand Rounds Brewing Co. in Rochester.

Grand Rounds was able to invest in the research and development of their beers, update equipment and hire another brewer, but the tax increase will mean making adjustments.

“I wish we had, you know, the ability to double our prices and have nobody say anything about it, or take a vote on it, but people vote with their dollars, and they vote with where they’re at,” Leung said. – Dec. 5, 2019, KAAL 6 News.

Gray Skies Distillery (Grand Rapids, Michigan) -- Expanding production:

Gray Skies has been in business for around two and a half years and has recently been able to expand production because of one specific aspect of the GOP tax law. It's called the Craft Beverage Modernization and Tax Reform Act, which was an amendment to the big picture bill Trump signed into law in December.

There's a lot to the law, but here's why it matters to Gray Skies and other distilleries like it: excise taxes are much, much lower for them now. 80% lower to be exact.

"The instant a drop of alcohol is produced, tax is owed on that," said Steve Vander Pol, who co-founded Gray Skies and serves as the head distiller.

The law reduces excise taxes on producers from $13.50 per proof gallon for the first 100,000 gallons produced to $2.70 per proof gallon.

"We're talking thousands of dollars every quarter that we're saving," Vander Pol said, "and obviously for someone on this sized scale to write a check that's reduced by 80% is pivotal. It's been huge for us." - June 4, 2018, WZZM article excerpt

Great Lakes Distillery (Milwaukee, Wisconsin) – Used savings from the Tax Cuts And Jobs Act to add space and buy new equipment:

When the Craft Beverage Modernization and Tax Reform Act was passed two years ago, Great Lakes Distillery founder and owner Guy Rehorst was able to make a lot of advances to his business with the added savings. He added space to his Walker's Point distillery at 616 W. Virginia St. in Milwaukee. He also added new equipment and new personnel and began producing more product for future sale. – Dec. 10, 2019, Milwaukee Business Journal.

Fremont Brewing (Seattle, Washington) – The Tax Cuts and Jobs Act allowed the company to expand healthcare benefits to employees' dependents: 

In 2017, Congress passed a tax cut for breweries, distillers, and wineries. Nelson said that allowed them to invest in additional employee benefits, like extending health benefits to employees’ dependents.

“We've got young people that are getting married and having families, and they are needing benefits,” she said. “So we decided that we would extend health benefits to the dependents of those families.” – Dec. 18, 2019, KIRO article.

Helio Basin Brewery (Phoenix, Arizona) – The Tax Cuts and Jobs Act allowed the brewery to expand:

Local breweries have been paying a $3.50 tax per barrel, but once the bill expires, it will double, increasing to $7 per barrel. "Even though it doesn't sound like a lot of money, a $3.50 increase, it really does matter a lot to us, especially at our scale," said Dustin Hazer, the owner of Helio Basin Brewery. "Pretty much anything we try to do to increase our efficiency, it's a matter of change. It's not even once the sale happens; it's once we process it. So, we're getting immediately taxed on that volume. It's not when we sell it; it's when we process it."

Hazer opened his brewery a little more than three years ago, before the tax break was put in place.  "The first year we had the full tax and then the last couple we've had the nice tax," he said. "Basically, when that tax break happened, we started to launch into some of the bigger stores, can products. We wouldn't have been able to do that even though it doesn't seem like a lot of money." – Dec. 5, 2019, AZFamily article.

Iron Fish Distillery (Thompsonville, Michigan) – Because of the Tax Cuts And Jobs Act, the owner was able to create new full time jobs and invest in the company:

“For us this has been a game changer. This tax incentive, this tax decrease really came right at a time when we needed to take some risks, and invest in the business and hire people and so it was, I think, as intended, worked here at Iron Fish,” said Anderson. – Dec. 17, 2019, 9&10 News article.

Jordan Winery (Healdsburg, California) -- $1,000 bonuses for each of its 85 employees:

In response to the tax cut bill that passed this week, John Jordan, owner of Jordan Winery in Sonoma County, California, announces that he will give all eligible winery employees a $1,000 bonus as a result of the passage of the 2017 tax reform bill. – Dec. 22, 2017 Jordan Winery press release

Keg Creek Brewing (Glenwood, Iowa) - Expanding operations, purchasing new equipment:

“A small brewery in Glenwood, Iowa, in Mills County called Keg Creek is expanding their operations and investing in new equipment as they grow.” - June 11, 2018, Rep. David Young statement on U.S. House Floor

Lazy Magnolia Brewery (Kiln, Mississippi) - provide employee benefits, give employee promotions, and complete facility upgrades:

Known for its Southern Pecan Nut Brown Ale, Lazy Magnolia opened in 2005 and is the oldest packaging brewery in Mississippi. With the money saved from the tax cut, Henderson said the brewery has been able to improve benefits for employees, convert two part-time jobs to full time and improve the brewery's taproom. - June 2, 2018 CNN article excerpt

 

Lewis & Clark Brewing Co (Helena, Montana) - hiring new employees:

At Lewis and Clark Brewing Co., Pigman expects to save $25,000 this year because of the provision in the tax reform that he said brewers like him have been working to get for three years.
 

The money is going to hiring — an employee was brought on last week and Pigman is looking for two more full-time positions each in production and sales. - May 6, 2018 Helena Independent Record article excerpt

 

Loon Liquor (Northfield, Minnesota) – Because of the Tax Cuts and Jobs Act, the business was able to reinvest in the community and buy more equipment:

Mark Schiller of Loon Liquor in Northfield also that the tax break has enabled his distillery to expand its business dramatically, which he's reinvested in the local agriculture community and other local businesses. If the tax break goes away, he says it would force him to cut back planned investments significantly.

"This tax break enabled us to invest more in local agriculture, more in our inventory, more in barrel aging our spirits, which is important for future profitability, and more in equipment," he said. "If it goes away, that will dramatically impede our business growth or our ability to invest in growth." – Faribault Daily News

Lyon Distilling Company (St. Michaels, Maryland) – The owner said that the distillery used savings from the Tax Cuts and Jobs Act to double locations, create new jobs, and invest in new equipment:

I mean, in the last two years every distillery I know has taken the savings from this tax cut and reinvested in their team, in their equipment, expanded, doubled locations. Lyon Distilling has grown ten times in size alone in the last two years. – Dec. 5, 2019, WMAU radio show.

Maine Beer Co. (Freeport, Maine) – The company used savings from the Tax Cuts and Jobs act to expand and reinvest in the business and employees:

“The savings resulting from the adjusted FET rates have had a huge impact on the brewing industry here in Maine,” Dan Kleban, co-owner of Maine Beer Co., said in a news release from the Brewers Association, a Boulder, Colo.-based trade group.

“Our company was already in the midst of an expansion when this bill passed, and the savings allowed us to reinvest in the business, our employees and the environment," Kleban said. "Growth in Maine’s brewing industry has helped boost other economies throughout the state; creating new agricultural opportunities, helping increase tourism and even shaping beer science programs in our local colleges. In uncertain financial times, these savings help create a stronger economic future here in Maine.” – Dec. 27, 2019, Mainebiz article.

Market Garden Brewery (Cleveland, Ohio) – The tax cuts allowed the brewery to add new jobs and invest more in their facility:

Sam McNulty, co-founder of multiple Cleveland brewery/restaurants including Market Garden Brewery and Bar Cento, credited the tax break with helping his operations expand at an accelerated rate, "which in our case meant several million dollars of investment in our facility as well as the creation of a large number of full-time positions."

Not having certainty for the tax cut beyond next year could stymie other, more long-term investments.

"As in life, so it goes in business, where if the future is uncertain, you are more likely to be less secure and optimistic and thus more conservative and frugal," McNulty said. "There's not a bank on the planet that will finance a business that has only a one-year lease. And so a one-year extension is appreciated, but it is not enough to really fuel this growing industry and reach the full promise of the economic benefits of local craft beer." – Dec. 17, 2018, Crains Cleveland article.

Middle Ages Brewing (Syracuse, New York) – The Tax Cuts and Jobs Act allowed the company to reinvest in employees and equipment:

"For us it completely went back into the business or reinvested into employees or equipment,” said Isaac Rubenstein, the director of production at Middle Ages Brewing. “It was huge."

Newer breweries have been saving a few thousand dollars a year. Middle Ages has been saving about $20,000, so they're on edge about losing the tax relief.

"It would be devastating,” said Rubenstein. “Plans for next year might have to change, redo the budget a little bit. Some equipment that's on the list might get crossed off. It might be a part time employee. It would be really bad." – Dec. 18, 2019, Spectrum News article.

Mississippi River Distilling Co. (Le Claire, Iowa) – The owners of the distillery said that the Tax Cuts and Jobs Act helped create new jobs:

Both Quint and Ryan Burchett, co-owner of Mississippi River Distilling Co. in Le Claire, said the tax cut — formally called the Craft Beverage Modernization and Tax Reform Act — has helped their businesses add full- and part-time jobs. 

Cedar Ridge currently has 24 full-time and 28 part-time employees and, Quint said, now that he’s “optimistic” the liquor tax cut will be extended, he plans to make two new job offers over the next two weeks.

Burchett said Mississippi River Distilling had three full-time and five part-time employees in 2017, before Congress approved the liquor tax cut as part of the broader Tax Cuts and Jobs Act– Dec. 18, 2019, The Gazette article.

Mother Earth Brewing Company (Nampa, Idaho) -- The Tax Cuts and Jobs Act allowed the brewery to almost double their production, buy new equipment, and hire new employees:

Even the largest Idaho craft brewery has a fraction of that productivity. Mother Earth's Idaho brewery (the company has a second location in California) produced 10,000 barrels in 2018, the first year of the tax cut. This year, the brewery expects to produce 18,000 barrels, according to owner Daniel Love.

 ….

Mother Earth hired two new employees and bought two Unitanks, stainless steel fermenters, with the tax savings. -- Oct. 19, 2019 Idaho Press Article

Newport Craft Brewing & Distilling (Newport, Rhode Island) – Because of the Tax Cuts and Jobs Act, the company was able to buy new equipment and expand:

"The past two years has seen us invest heavily in the business, hiring people, investing in equipment and expanding. That becomes much more difficult when there's a sudden huge expense," Brent Ryan, co-founder of Newport Craft Brewing & Distilling, said.

"A lot of brewers and distillers were managing through it before two years ago, gradually growing, and when the tax law passed, they were able to say, 'Wow, I can invest even more in my business.' Now, if this doesn't get passed, you're looking at having businesses cut back on hiring and investing and growth." – Dec. 25, 2019, Providence Journal article.

Ole Smoky Distillery (Gatlinburg, Tennessee) - bonuses for non-senior management employees, purchasing new equipment, opening a new distillery, hiring new employees:

“We are very supportive of the new tax programs, as they are providing an opportunity for us to further invest in our team and business activities,” said Robert Hall, CEO of Ole Smoky Distillery. “We greatly value all our very talented employees, and are always striving to do what is best for them and the surrounding community. We will be using some of our tax savings to reward many of these hardworking individuals, as well as increasing our investment in new business endeavors. We couldn’t think of a better day to make this announcement.”

The moonshine distillery will be using some of the tax cut savings to provide bonuses for all employees below senior management, proportional to their tenure with the company. Additionally, because of its rapid business growth, the company has created many more jobs, particularly in East Tennessee, and plans to continue that growth by investing further in its Sevier County distilleries and expanding its footprint to Nashville, where it plans to open a 4th distillery and retail/entertainment location in the fall. New equipment has already been installed at the company’s largest distillery, the Holler, in order to expand production capacity. More equipment is on order for its Pittman Center bottling facility to continue the capacity expansion of that facility. - April 17, 2018, Ole Smoky Distillery press release excerpt

One Coastal Bend (Corpus Christi, Texas) – The tax cut allowed the brewery to create new jobs and buy more equipment:

One Coastal Bend craft beer brewer is breathing a sigh of relief after Congress decided to extend a federal tax cut.

Nueces Brewing Company, co-owned by Brandon Harper, opened back in June with help from the Craft Beverage Modernization and Tax Reform Act. The Reform Act allows breweries a cut in the amount of taxes paid on the first 100,000 proof gallons. A temporary excise tax cut was set to expire on Dec. 31.

Harper said Congress agreed to extend it for another year. Harper will continue to be taxed $7 on every barrel of beer he produces instead of $14.

"The last thing we want to have to do is to raise our prices. We want to be able to keep operating, provide great beer at affordable prices. It's hard for us to compete with the big boys," Harper said.

According to Harper, thanks to that tax cut he can now buy more equipment and hire more people. – Dec. 17, 2019, KIIITV article.

Pig Minds (Machesney Park, Illinois) – Because of the Tax Cuts and Jobs Act, the brewery was able to create new jobs:

Illinois breweries have 26 days until a tax break expires. That's why hundreds of small businesses are coming together to ask congress for an extension.

For Shane Johnson, expanding Pig Minds in Machesney Park is going to make a huge difference in the way it does business.

"We are getting ready to expand our brewing capabilities, add a canning line so we can get a bigger footprint out and keep up with demand. We have a problem with keeping up with demand with two of our beers, especially in the summer time. This is going to alleviate that problem," said Pig Minds General Manager Shane Johnson. 

One way the brewery was able to expand is with a little help saved from the Federal Excise Tax (FET) rate. The Illinois Craft Brewers Guild says since 2017, the tax break has saved breweries money by lowering the cost of barrels from $7 each to $3.50 each. – Dec. 5, 2019, WREX article.

Port City Brewery (Alexandria, Virginia) -- Because of the Tax Cuts and Jobs Act, the company was able to pay employees more, offer better benefits, and buy more equipment:

At Port City, which opened in 2011 and is the oldest packaging brewery in the Washington, D.C.-area, the lower rate amounted to annual savings of roughly $50,000, Butcher said. With that money, Port City was able to pay its employees more, provide them with better benefits, including the employer match for retirement, and add more tanks and automation, he said. 

"All those things have become much easier with this lower tax rate," Butcher said. -- Sept. 26, 2019 Washington Examiner

Portland Cider Company (Clackamas, Oregon) – Because of the Tax Cuts and Jobs Act, the owner was able to create new jobs and invest in new equipment:

Jeff Parish, Co-Founder of Portland Cider Company and Committee Member of the United States Association of Cider Makers: “As a cider maker, the temporary CBMTRA allowed me to purchase new equipment, hire new staff and grow my business. If the excise tax credits go away, I have to reverse those choices. We're hopeful the permanent version of the bill passes, so we can plan with certainty for a growth-future." – Feb. 6, 2019, U.S. Senate Finance Committee press release.

Portsmouth Brewery (Portsmouth, New Hampshire)  – The founder of the brewery said that the tax cut allowed the company to hire more employees and invest in new equipment:

"For a small brewery like us, we make about 1,000 barrels a year,” said Peter Egelston, founder of Portsmouth Brewery. “So saving $3.50 per barrel, you can do the math, that's about $3,500 in savings. That may not sound like a lot of money, but it is."

The tax cut was set to expire at the end of 2019, but with support from Congress, Trump signed a one-year extension. 

"That's money going back into small businesses, and it's being used to invest in equipment,” said Egelston. “It's being used to hire more people. It's being used in a lot of different ways. That’s a choice each individual business can make. When they get a windfall like a reduced tax rate, they can either keep that money in the business or they can pass it along to the consumer in the form of lower prices."  – Jan. 1, 2020, WMUR article.

Rebecca Creek Distillery (San Antonio, Texas) -- The company was able to use savings from the Tax Cuts and Jobs Act to hire more people and expand: 

Rebecca Creek Distillery LLC’s Steve Ison said that if Congress fails to extend that tax relief, it will severely strain the craft beverage industry and hamper his company’s ability to continue expanding. 

“It saved us a million bucks,” Ison said. “With that money, we were able to expand and hire more people.”

Backers of the act note that it reduces taxes on distilled spirits, for example, by more than $10 for the first 100,000 gallons produced or imported annually. There is less of a reduction for additional gallons produced. -- Dec. 3, 2019 San Antonio Business Journal

Red Leg Brewing Company (Colorado Springs, Colorado) – The local brewery was able to use money saved because of the Tax Cuts And Jobs Act and put it towards hiring more people, health insurance for employees, 401(k) contributions for employees, and for production growth:

 

In a matter of days, Red Leg Brewing Company will tap into its next chapter.

The company announced this week it will break ground on an $8 million expansion project Friday along Garden of the Gods Road.

Todd Baldwin, president and founder of Red Leg, told News 5 the move will enable his company to increase its beer output from 2,500 barrels to 10,000.

"Our goal was always to be the craft beer of the military, to be on every military base in the world, and this new facility's going to allow us to do that," Baldwin said.

Red Leg's growth is not only tied to the product and innovative ideals. As a whole, craft brewers have also capitalized on an excise tax break included in President Trump's 2017 tax cuts, reducing what they pay the government for every barrel produced.

That relief allowed brewers to use the money elsewhere. At Red Leg, Baldwin said it paid for production growth, improvements in quality assurance and manpower.

"The last two years, we've invested more in now only our people here, but we were able to start health insurance and a 401(k) this year for our employees, which is super cool. And we were able to bring on more employees," Baldwin said.  – Dec. 10, 2019, NBC Southern Colorado.

Right Proper Brewing Company (Washington, D.C.) -- The Tax Cuts and Jobs Act allowed the company to keep beer prices low:

At Right Proper Brewing Company in Washington, D.C., the tax cut saved the company more than $13,000. The brewery produces roughly 600 barrels annually at its restaurant and another 3,200 barrels at its production house in Northeast D.C., which opened in December 2015, co-owner Leah Cheston said.

 With the rate of $3.50 per barrel, the reduced federal excise taxes have allowed Cheston to keep prices at Right Proper's brewpub low, especially when compared with other restaurants in the area.

 "It's prevented us from having to raise prices because everything increases constantly," she said. "To get that break is great. As a small business, every little bit counts." -- Sept. 26, 2019 Washington Examiner

Russian River Brewing Co. (Windsor, California) – Because of the Tax Cuts and Jobs Act, the owner is planning on using the savings to buy "a freakin' generator."

Russian River Brewing Co. in Windsor would save about $140,000 next year from the federal excise tax break if it produces up to 40,000 barrels, co-owner Natalie Cilurzo said.

“Guess what we will probably spend that on? A freakin’ generator,” Cilurzo said in a text, referencing backup costs incurred from the October PG&E power shut-offs and the possibility the brewery will buy instead of rent a generator for next year’s wildfire season. – Dec. 18, 2019, Sonoma News article.

Shortway Brewing Co. (Newport, Connecticut) -- Increasing wages and hiring new employees:

Mr. Shortway said the new tax plan, along with the Craft Beverage Modernization and Tax Reform Act, also passed last year, have already helped the brewery save money. The craft beverage act greatly reduced excise taxes on small-scale brewers and the tax plan has additional provisions designed to help small businesses. - May 11, 2018, Carteret County News-Times article excerpt

Sprecher Brewing Company (Milwaukee, Wisconsin) – The brewery used savings from the Tax Cuts and Jobs Act to reinvest in the company and create new jobs:

"Other breweries in this area are certainly doing the same thing with the savings they get as we are here," said Jeff Hamilton, president of Sprecher Brewing Company. "This act gave a bit of a tax break to all alcohol producers."

Right now, the team at Sprecher said the money saved from the tax breaks goes back into the business.

"Gives us additional funds that can be reinvested back into the company," Hamilton said. "Back into creating additional products, which on top of that creates new jobs."  Oct. 9, 2019, Fox 9 article.

Southern Grace Distilleries (Mount Pleasant, North Carolina) – Hiring new employees, expanding visitor center, and investing in business expansion:

"The reduction in the federal excise tax has allowed us to hire additional staff, increase our whiskey production, expand our visitor center and invest in marketing which is critical to the growth of our Conviction Small Batch Bourbon brand," said Southern Grace Distilleries CEO Leanne Powell. "At the end of last year our bourbon was available in NC, SC and Washington, DC. Today you can also find Conviction Small Batch Bourbon in Louisiana, Illinois, Oklahoma and Connecticut. We couldn't be happier." – April 26, 2018 Southern Grace Distilleries press release excerpt

St. Augustine Distillery (St. Augustine, Florida) - Hiring new employees, purchasing new equipment and inventory:

“As a young business facing more than their share of regulatory challenges, the St. Augustine Distillery was relieved, to say the least, when the Tax Cuts & Jobs Act was signed into law. The distillery announced shortly after the bill’s passage that they would be using their savings to make further investments in their employees and increase their equipment and inventory, creating new local jobs and hiring additional staff to manufacture, market, and sell their products.” - May 17, 2018, Rep. John Rutherford statement on U.S. House Floor

Stillmank Brewery (Green Bay, Wisconsin) – The owner of the brewery said that he was able to use savings from the Tax Cuts and Jobs Act to create new jobs and grow his company:

It did help us,” Brad Stillmank, Owner and Brewer at Stillmank Brewery in Green Bay said, “you know, accelerate our growth to where we are now.”

Stillmank added that his brewery currently produces between 1,500 and 2,000 barrels of beer annually, meaning that with the tax cuts, his business is saving almost $7,000 every year.

He explained that breweries are still taxed in other ways, despite the cut, “We’re still responsible for paying all the other taxes that any other business would have to, this is just a tax that’s above and beyond for our particular business segment.”

....

Stillmank says that over the past two years, he has been able to invest more in his business and the community, evening hiring extra personnel as a result of the tax breaks.

“For the last two years we’ve been doing our best to take advantage of the opportunity that we have had with that,” he explained, “and we have grown our company and we have added employees.”

Without the tax cuts, Scanzello told Local 5 he worries that that kind of growth will falter across the area, including in businesses that supply local breweries.

“Cleaning chemical companies, hop purveyors, or equipment manufacturers are all going to be impacted by anything that’s going to stunt the growth in the industry,” he said. – Dec. 11, 2019,  CBS Green Bay Article.

Stormcloud Brewing Company (Frankfort, Michigan) -- Savings from the Tax Cuts and Jobs Act allowed the company to buy new equipment and hire more employees:

“When the initial tax credit passed, it was an immediate savings for us and we were at a time when our business was continuing to grow, and so we took that opportunity to look at how we could invest in additional equipment, which brought on new employees as well,” said Stormcloud Co-Owner Rick Schmitt.

“We were able to add tank space, which allowed us to increase our distribution footprint, so today we’re in 35 counties in Michigan and likely we wouldn’t be there today if it weren’t for this tax credit,” said Schmitt.-- Oct. 7, 2019 9 & 10 News 

Streetside Brewery (Cincinnati, Ohio) – Used savings from the Tax Cuts and Jobs Act to hire more employees and buy new equipment:

Garrett Hickey was among those who were feeling relieved as 2020 arrived. He is a co-owner of Streetside Brewery which does 1,200 barrels a year.

Its per barrel tax would have doubled if President Donald Trump had not signed an extension of the federal alcohol tax cut. As a result, Streetside foresees a steady, unimpeded trickle-down flow from the suds.

"Continue to hire new people, continue to buy new equipment, continue to work with charitable places," said Hickey. – January 3, 2020, WLWT5 article.

Sugarlands Distilling Company (Gatlinburg, Tennessee) – The Craft Beverage Modernization Act – a key part of the Tax Cuts and Jobs Act – helped Sugarlands Distilling Company plan a new 42,000 square foot distillery and barrel house. Sugarland is also investing $2 million in new equipment:

“We’re a small distillery, and this is a huge risk, one that we couldn’t have taken without the Craft Beverage Modernization Act. That’s given us the capital and the confidence that we needed to make a big bet on the future of our company. This month, we are breaking ground on a 42,000 square foot distillery and barrel house. We’re purchasing over $2 million worth of equipment, including one of the biggest pot stills Vendome has ever made. Each year, we’ll be buying almost $3 million pounds of corn and rye, and thousands of handcrafted American Oak barrels to produce our Tennessee whiskey.” -- Ned Vickers, President and CEO of Sugarlands Distilling Company

Sugarlands has a wonderful new video telling the story of the expansion. Here is an excerpt from the video:

“Our business is our passion. But just like every other business, we have our share of challenges. The Craft Beverage Modernization Act has allowed us to plan expansion, buy new equipment, create more jobs, and introduce ourselves to people in new neighborhoods. It means we can continue making an impact felt by all of our families, partners, and friends, for years to come.”

Sugarlands Distilling Company is a maker of many fine moonshines available online or in person in Gatlinburg.

San Tan Brewing (Chandler, Arizona) – The Tax Cuts and Jobs Act allowed the brewery to put their spirits on the market:

Anthony Canecchia owns San Tan Brewing, a company that produces large quantities of beer and a small amount of distilled spirits.

Canecchia and his team had been experimenting with spirits for a while before they put them on the market. In 2017, considering the tax cut, it seemed like a natural time to start production, he says. San Tan Distilling started selling its spirits, such as Saint Anne's vodka and Sacred Stave whiskey and bourbon, in 2018. – Dec. 20, 2019, The Arizona Republic article.

Telaya Winery (Boise, Idaho) -- The winery hired more employees and improved its marketing because of the Tax Cuts and Jobs Act.

At Boise’s Telaya Winery, grapes are sorted by hand onto a conveyor belt heading to the destemmer. Owner Earl Sullivan said the big bunches of fruit need to be pulled apart or they can explode in the machine.

“It’s a product of the freeze we just had a couple days ago,” he said, “We’re just having to work a little bit harder to make sure the fruit is as clean as we want it.”

 Sullivan is also the chair of the Idaho Wine Commission Board. Today’s grapes are processed and barreled for aging, but won’t be bottled and taxed as wine for two years. That delay can make tax law changes difficult to prepare for. 

 “We spend several hundred thousand dollars per year on production for two years down the road, so the most likely impact in the short term would be a reduction in production,” Sullivan said. He also noted the winery has beefed up its hiring and marketing in the last two years while the tax rates have been lower. -- Oct. 22, 2019 Boise State Public Radio

The Beer Shop Co. (Tempe, Arizona) – Because of the Tax Cuts and Jobs Act, the owner was able to open his business and create jobs:

Dylan DeMiguel is a partner at the The Shop Beer Co. in Tempe. 

Originally he thought he’d head to law school, but it turns out his entrepreneurial spirit drew him into the booze business. 

It's booming, he says, thanks in part to a tax break that went into effect in 2018.

“We’re taking this money to fuel the growth of this company. We’re literally hiring people,” DeMiguel said. “We’re buying equipment. And we’re investing in our community.” – Dec. 8, 2019, KPNX 12 News article.

Thomas Hooker Brewery (Bloomfield, Connecticut) – The brewery used savings from the tax cut to expand the business and create new jobs:

U.S. Senator Richard Blumenthal of Connecticut says a federal tax credit for small-scale breweries, distilleries and wineries has helped create jobs in Connecticut.

The tax credit for small scale alcohol producers was initially part of the 2017 Trump tax cut. It’s been extended in the bipartisan federal budget passed by Congress last month. Blumenthal says he opposed Trump’s tax cuts to big business, but this particular tax cut is for small businesses and is a job creator.

“These craft breweries put the savings back into their businesses. They create jobs. They produce more beer. They meet demand. And they provide good value.”

Blumenthal spoke at Thomas Hooker Brewery in Bloomfield. Brewery owner Curt Cameron agrees that he’s putting 100% of his tax cut back into his business, “in our case a brand-new pizza kitchen, which is an offshoot of our existing business. It will create at least seven jobs immediately.”

If the tax break had not been extended, craft breweries like Thomas Hooker would have faced a federal excise tax increase of 400% this year. – Dec. 31, 2019, WSHU article.

The Mitten Brewing Company (Grand Rapids, Michigan) -- Because of the Tax Cuts and Jobs Act, the Michigan Brewery was able to produce new beer, preform new research, hire new employees, give employees pay raises and bonuses:

"It literally put money back into our pockets that we were spending before. We had been producing a bunch of new beers that we have been able to research and develop, and we’ve retained key employees, by giving them bonuses, raises, bringing in new employees," said Max Trierweiler, co-owner of The Mitten Brewing Company.” -- Oct. 7, 2019 WZZM13 Article.

The Raleigh Rum Company (Raleigh, North Carolina) – The rum company was able to reinvest in the business because of the Tax Cuts and Jobs Act:

The Raleigh Rum Company got its start back in 2014. 

“The Raleigh Rum Company was actually started by three of us. We’re actually friends from high school. We went to Apex High in the area and we actually were just really inspired by the awesome craft beer that was in the area,” Matt Grossman, Co-Founder said.

Both local businesses helped by the Craft Beverage Modernization and Tax Reform Act that Congress passed back in 2017.

It lowered the federal excise tax from $13.50 per proof gallon to $2.70. Per bottle, the tax went down from $2.14 to 43 cents. 

“That was a big impact for us. We were able to kinda reinvest into our business. Operate our equipment a little bit. We were definitely planning on making some hires here pretty soon,” Grossman said. – Dec. 17, 2019, CBS 17 article.

Trail Distilling (Oregon City, Oregon) – The distillery was able to hire more employees and invest in new equipment because of the Tax Cuts and Jobs Act:

“It allowed us to put that savings back into our distillery,” Sara Brennan, co-owner of Oregon City’s Trail Distilling told KOIN 6 in September. “It allowed us to hire more people for sales … (and) invest in more equipment so we can distill more product.” – Dec. 15, 2019, KOIN 6 article.

Twisted Path (Milwaukee, Wisconsin) – Because of the Tax Cuts and Jobs Act, the business is planning on hiring new employees:

With less than 20 days until the Craft Beverage Modernization and Tax Reform Act expires, local craft distillers are getting nervous. Brian Sammons, owner of Twisted Path Distillery in Milwaukee's Bay View area and president of the Wisconsin Distillers Guild, said the last few weeks have been scary for him and his small craft business.

"It's goofy to have this much business uncertainty just hanging in the balance," Sammons said.

…..

Sammons only has two full-time employees and four part-time. He is waiting to hire a full-time sales and marketing person because of the act's uncertain future.

Local distillers such as Sammons points to the political distractions in the House and Senate as a reason for the act's idleness. The act is bipartisan with 326 co-sponsors in the House and 73 co-sponsors in the Senate, more than three-quarters representation in each chamber. – Dec. 16, 2019, Milwaukee Business Journal article.

Warped Wing Brewing Co. (Dayton, Ohio)  – The brewery plans to use savings from the tax cut to give raises to employees and buy new equipment:

“It’s a big deal for most of the breweries in Southwest Ohio,” said John Haggerty, co-owner of Warped Wing Brewing Co. in downtown Dayton.

Without the tax cut, beer brewers and most alcoholic-beverage producers would have been looking at a higher tax bill the second week in January. The tax cut also reduced the amount that distilleries paid on the first 100,000 proof gallons from $13.50 to $2.70 per gallon. A proof gallon is a gallon of spirits at 50 percent alcohol.

“We’ve been waiting for this. We planned for it to go up in our strategic budgeting for next year, but it’s hard because it affects decisions like giving raises to employees, buying new equipment, future bank loans and ultimately the price beer drinkers would have to pay. – Dec. 30. 2019, Dayton Daily News article.

Wibby Brewing (Longmont, Colorado) – Because of the Tax Cuts and Jobs Act, the brewing company was able to expand:

“We are so thankful that Congress has extended the current federal excise tax rates for another year,” said Ryan Wibby, president and brewmaster, Wibby Brewing, Longmont, Colo. “When preparing the 2020 budget, I was struggling to find the capital needed for the expansion of our growing brewery. The extension of the FET rates will free up $20,000, which will allow us to purchase the production equipment necessary to meet our projections and achieve our goals.” – Dec. 23, 2019, Wine Industry Advisor article.

Wood Boat Brewery (Clayton, New York) - Hiring new employees, expanding production:

Similarly, small producers of beer and liquor seem to be well positioned to take advantage of tax savings given the large cut to the federal excise charge across the industry.  Mix in a lower overall tax rate and the savings start to add up. Some are using the proceeds to hire and reinvest. For example, in Watertown, NY, the Wood Boat Brewery started posting ads for full-time help after the law passed.

Owner Michael J. Hazelwood told the Watertown Daily Times in December that he’d likely expand production and hire staff with savings realized from the reduced excise tax. Now, like the Klavers of SALUS, it appears he has. - April 18, 2018, Capital One blog post excerpt

If you know of any additions to this list, please send to jkartch@atr.org

For the full national list of pay raises, bonuses, 401(k) match increases, expansions, and utility rate reductions due to the Republican tax cuts, visit www.atr.org/list

 

Photo Credit: Paul Joseph

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