April 02, 2015
LEWISTON, ME – Today, U.S. Senator Angus King (I-Maine) toured Baxter Brewing Co. in Lewiston where he applauded the small business’ success and highlighted legislation he has cosponsored, the Small BREW Act of 2015, that would support small breweries across Maine and America as they grow and create jobs.
“Baxter Brewing and its dedicated staff is a true Maine success story. With nothing but an idea and the passion to brew great-tasting beer, Luke put together a first-rate team and grew a business that has become not only a fixture of this community, but an important part of the local economy,” Senator King said. “It’s small businesses like Baxter that are putting people to work every day, drawing from local resources, and helping reinvest money back into the community. Undoubtedly, our local breweries have become a source of pride and a source of economic growth, and by reducing their tax burden, we can help give them the chance to grow and thrive even more for years to come.”
“We appreciate Senator King’s visit today and are grateful that both of Maine’s senators are so supportive of a reduction in the federal excise tax for small brewers, a move which would save Baxter more than $80,000 this year,” said Luke Livingston, President of Baxter Brewing. “Maine has quickly become one of the country’s most vibrant landscapes for craft beer, and the industry’s economic impact within the state has surpassed that of the skiing industry and only continues to grow. It’s refreshing to have federal legislators who not only understand our industry’s importance, but fully support it. There’s clearly nothing more bipartisan than craft beer.”
Led by Luke Livingston, the Founder and President of Baxter Brewing, Senator King toured the company’s brewing facility, which is forecasted to produce about 775,000 gallons, or approximately 25,000 barrels, of beer this year.
During the tour, Senator King spoke in support of the Small BREW Act of 2015, legislation introduced by Senators Susan Collins (R-Maine) and Ben Cardin (D-Md.) and cosponsored by Senator King that would reduce the federal excise tax on every one of America’s small craft brewers.
Because of differences in economies of scale, small brewers have higher costs for raw materials, production, packaging, and market entry compared to larger, well-established multinational competitors. Adjusting the excise tax rate would provide small brewers with an additional $65-$70 million each year they could use to start or expand their businesses on a local, regional, or national scale.
Under current federal law, brewers producing fewer than 2 million barrels annually pay $7 per barrel in federal excise taxes on the first 60,000 barrels they brew, and $18 per barrel on every additional barrel (one barrel = 31 gallons). Under the Small BREW Act, the rate would be $3.50 per barrel on the first 60,000 barrels. For production between 60,001 and 2 million barrels, the rate would be $16.00 per barrel. Then, the rate would be $18.00 per barrel. Breweries with annual production of 6 million or fewer barrels would qualify for these new tax rates.
There are now more than 3,200 small and independent breweries in the United States, including more than 60 in Maine, with approximately 1.5 more opening every day, according to the Brewers Association. Even though these small breweries represent about 12 percent of the U.S. beer industry in volume terms, they now represent the majority of jobs in beer. In 2013, craft breweries directly employed 110,273 people. They had a total economic impact of more than 360,000 full-time equivalent jobs generating more than $3 billion in wages and benefits; and paying more than $2.3 billion in business, personal and consumption taxes in towns and cities across America.