Few things can bring the parties together on tax policy — but brewers are hoping beer is one of them.

Where once the brewing industry was concentrated in Wisconsin, Missouri and Colorado in particular, the craft brewery boom today touches every state.


Now, traditional brewers and craft beer makers alike are hoping their broader political clout will help them achieve a long-sought goal: cutting the $7-to-$18 a barrel beer levy that they say is crimping their growth.

The effort has lured members from tea party conservatives like Rep. Patrick McHenry of North Carolina to liberal Sen. Ben Cardin of Maryland. They say the revenue lost — the more modest bill would lose about $700 million over ten years — will be more than made up by new jobs and expanding business.

“In my home state of Maryland, we’ve seen the number of craft breweries expand dramatically and their expansion very much depends on having capital,” Cardin said in an interview.

The beer federal excise tax brought in about $3.6 billion in each of the last two years, according to the Beer Institute. Brewery owners argue the taxes are impeding their growth.

Brooklyn Brewery owner Steve Hindy is one of those telling everyone he can that the tax is slowing his plans to expand with a new plant in Staten Island in New York City.

“That brewery is going to cost us maybe $115 million, that’s a big heavy lift,” Hindy said. “To finance that brewery we’re going to have to take on a lot of debt. The state is helping us and I think the city will be helping us too, but still it’s a very heavy lift for us.”

Congress is taking up the cause with members rallying behind two rival bipartisan bills: the Small BREW Act backed by many craft brewers and the Fair BEER Act supported by larger breweries. The latter was introduced to the Senate on March 20.

Reps. Erik Paulsen (R-Minn.) and Richard Neal (D-Mass,) and Sens. Cardin and Susan Collins (R-Maine) reintroduced the Small BREW Act this year and they’ve got about 41 co-sponsors in the House and 30 in the Senate.

The four pols’ states are among those enjoying the craft beer boom, which has seen sales across the country jump by 22 percent in 2014, bringing in nearly $20 billion.

The rival Fair BEER Act won support from Reps. Steve Womack (R-Ark.) and Ron Kind (D-Wis.), and Sen. Roy Blunt (R-Mo.) in the Senate. The House bill has about 50 co-sponsors, with the Senate effort at about nine so far, after being introduced on March 19th.

By alcohol content, beer is actually taxed at a lower rate than distilled spirits, and alcohol taxes in general are at historic lows, but that’s not stopping the industry push.

The Beer Institute of major brewers like AB InBev and MillerCoors spent $2.1 million last year on lobbying, up from $1.3 million in 2012, according to the Center for Responsive Politics. Spending is also up on the two rival bills.

The beer tax is a leftover “luxury tax” from the early 1990s, when taxes on goods from yachts to private airplanes were also hiked. Most have since been repealed or changed, but the beer tax remained.

Congress these days is lucky to keep the government running, so the odds of them voting to cut beer taxes may be slim. Other obstacles include public health advocates, who point to alcohol-related health issues and want a tax hike, and a lack of offsetting revenue to fund tax cuts.

Another major hurdle is division among the brewers themselves.

Current law defines small brewers as those producing up to 2 million barrels annually, with a tax of $7 per barrel on the first 60,000 barrels and $18 on every barrel after that. Breweries that produce more than 2 million barrels annually pay $18 on every barrel.

The “small brew” legislation would slice the tax on a small brewer’s first 60,000 barrels to $3.50, and then tax $16 on barrels up to 2 million. It also changes the definition of “small brewer” to breweries that produce 6 million barrels or less.

Companies and other groups spent approximately $12 million lobbying on the act last year, according to Senate reports, up from about $11.3 million a year earlier.

Backers say a big gap between the largest brewers and the rest of the industry makes the changes necessary. Anheuser-Busch InBev and MillerCoors domestically brewed 96 million and 55 million barrels last year, respectively, according to a trade group survey.

The third and fourth largest domestic brewers, Yuengling and Boston Beer (which sells Sam Adams), brewed less than 3 million barrels each last year.

These mid-tier companies would get the tax break under the legislation, but AB InBev and MillerCoors would not.

The opposing “fair beer” bill nixes the distinction between large and small brewers.

Lobbying for this version rose to about $14.6 million last year from about $11.4 million in 2013, Senate disclosure forms show.

Their bill imposes a graduated tax structure, but for all breweries based on how many barrels are brewed, ranging from no excise tax on the first 7,143 barrels produced to an $18 per barrel tax.

“We have a bipartisan list of sponsors and are hoping to get more,” Jim McGreevy, president of the Beer Institute.

But craft brewers are not on board because it’s not just a U.S. tax issue, according to Bob Pease, chief of the Brewers Association, which represents many of the craft companies like Brooklyn Brewery.

Anheuser-Busch is based offshore, and so is one of MillerCoors’ parent companies. These giants are thus in large part escaping the highest corporate tax rates among advanced economies, at about 35 percent, and closer to 40 percent with state taxed added in.

“The bottom line is their corporate tax rate is lower than it is for American-headquartered companies,” Pease said.

Both the offshore companies have U.S. roots, but through a series of mergers morphed them into global firms, enjoying lower tax rates on at least some of their profits.

AB InBev is headquartered in Belgium, and was formed when the St. Louis-based Anheuser-Busch merged with the international brewer InBev in 2008.

MillerCoors’ actually is based in Chicago, but the company is a joint venture between the Denver-based Molson Coors and the London-based SABMiller. SABMiller has the majority share.

Belgium’s corporate tax rate is 34 percent and Britain’s is 20 percent.

“[MillerCoors pays] all applicable U.S. federal and state taxes,” said Jonathan Stern, a spokesman at MillerCoors. “In addition to the normal taxes like corporate wage and property, we also pay in excess of $1.1 billion of federal excise taxes on our beers.”

To drive home the point, the company’s website asks: ‘Is MillerCoors still an American company?’ with the response, “Yes, MillerCoors is an American company.”

Not everyone thinks beer has a tax problem.

The Center for Science in the Public Interest points out that the federal beer tax has only been raised once in the last half a century, and they note boosting such taxes could generate tens of billions in revenue for public health.

Some studies have shown raising prices on alcohol can reduce binge drinking.

“A tax on alcohol raises the price of the alcoholic beverages, reducing economic availability and reducing consumption, which leads to reductions in adverse health and social outcomes related to alcohol consumption,” the Society for the Study of Addition wrote in a report on the relationship between alcohol taxes and binge drinking.

But despite bipartisan backing on both sides, the companies say they know they are competing with bigger issues dividing a sharply partisan Congress.

Both groups have been trying to get versions of their bills through Congress for several years. “We certainly feel our chances of passage have been harmed, in the last four years for sure, by partisan gridlock in Congress,” Pease said.

The Beer Institute’s McGreevy was similarly sanguine.

“We’re in the first inning of the two year legislative cycle, I couldn’t and I don’t think anyone could predict when [the Fair BEER Act] would pass,” he said.