The Small BREW Act May Provide Tax Relief to Local Breweries

Small BREW Act, Illinois small business lawyer, attorney in Illinois, small business taxesIllinois’ local brewery business is booming. In the last few decades local beer brewers have emerged as some of the region’s most successful small businesses. Many of these local brewers ship their beers across the country, while also maintaining a local presence through flagship restaurant locations throughout the state. State legislatures are acknowledging the positive impacts that these local, homegrown small businesses are having on their community. In fact, the Small Brewer Reinvestment and Expanding Workforce Act — the Small BREW Act —  has been presented in order to provide these local small businesses with some much needed tax relief. Our small business attorneys are carefully watching the progression of this bill in order to determine what effects it may have on small brewers in Illinois.

What is the Small BREW Act?

The Small BREW Act is designed to reduce the degree of excise taxes imposed on beer brewers operating in Illinois. The Act would only apply to small breweries that produce less than six million barrels per year. It would be replacing the current small brewer threshold and tax rates created in 1976. Under the current laws, brewers are forced to pay an excise tax that is equal to $18 for every barrel of beer that they brew. Brewers producing less than two million barrels per year are allowed to pay a reduced tax of only $7 per barrel for the first 60,000 beer barrels that they brew.

Since the current law was created, the beer barrel production of America’s biggest brewers increased significantly from 45 million to 105 million barrels a year. This indicates that the times are changing when it comes to beer brewing, which is now occurring at a larger scale for both small and big breweries across the country. The proponents of the Small BREW Act feel that the law should reflect this increase.

As a result, the Small BREW Act has been proposed, which would reduce the excise taxes to just $3.50 for the first 60,000 barrels produced, while also only taxing $16 on additional barrels beyond the first 60,000 barrels up to the amount of two million. Ultimately, the Act would serve the purpose of changing the definition of small breweries as being those that produced two million barrels to a new number of six million barrels or less produced all year.

How Will Illinois Benefit from the Small BREW Act?

Proponents believe that the success of the Act will foster small business growth and provide a competitive edge for local entrepreneurs. Given the financial troubles facing Illinois, the incentives provided by the Act will hopefully strengthen local small businesses, while providing a production boost that can result in millions of additional dollars entering the Illinois economy. In fact a Harvard study researched the potential economic impact of the Act. The study estimates that the Act could boost annual job growth, including the creation of around 5,230 new jobs during the first year alone.

The success of the Small BREW Act would undoubtedly bring positive advantages to the local small business brewery community in Illinois. Contact the small business law attorneys here at The Gierach Law Firm in Naperville, Illinois for any small business law issues that you may be facing.