More Hops, Less Tax for Brewers

Posted at: 07/05/2013 5:17 PM | Updated at: 07/05/2013 5:40 PM
By: Travis Dill
tdill@wdio.com

Demand for craft beer keeps growing, but tax laws have not changed in decades. Senator Amy Klobuchar wants to help small breweries by cutting the tax per barrel in half.

Craft beers are like liquid gold and small breweries are using it to grow and create jobs. Sen. Amy Klobuchar, D-Minn., sampled the beer that is fueling those small businesses in the Northland on Friday.

“The fact that they are doing things right here is exactly the model that we want to increase jobs in this country,” Klobuchar said.

She said she wants to give the breweries a break. She has co-sponsored a bill that will reduce the tax paid on every barrel of beer. The legislation would drop the tax from $7 down to $3.50.

“That makes a huge difference to creating more jobs and bringing more micro-breweries on tap, so to say, across the country,” Klobuchar said.

She toured Fitger's Brewhouse and said it's an example of how the craft beer economy works. Master Brewer Dave Hoops said he is proud of what their beer has done.

“In our company we have over 300 jobs and the beer is pretty much funding and driving it all. Although we certainly need the restaurants and everything else to work symbiotically,” Hoops said.

Klobuchar said the tax break can help new companies too, like the Castle Danger Brewery. In just two years the small business is doing so well it is out growing its tanks according to owner Clint MacFarlane.

“It's encouraging and scary at the same time,” MacFarlane said.

He said the success can be scary because the business need so much cash in the coffers for ingredients and equipment. He said the tax break would ease that burden.

“Any leg up we can get is helpful. Like I said we have people we want to hire and we can only do so much,” MacFarlane said.

Castle Danger Brewery will move into a bigger space in Two Harbors soon, and all the brewers involved said the proposed legislation could help ferment more business across the country.

Klobuchar said the tax break would only affect small breweries that have a big local impact. She said that was possible because the changes would only apply to brewing 60,000 barrels or less.

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