Every time you drink a beer, you pay extra because federal law adds an excise tax. In fact, an estimated 40 percent of beer’s cost is due to taxes, higher than for many other consumer products. A bill currently pending in Congress would eliminate that tax for more than 90 percent of distributors. And even for the biggest distributors like Budweiser and Miller, it would still significantly cut the tax for them too. Which would mean lower prices for you.

Taxes for breweries

Here are the numbers: Currently, most beer brewers pay a $7 per barrel excise tax on the first 60,000 barrels of beer they produce, and $18 for every barrel after that. The Fair Brewers Excise and Economic Relief Act — or Fair BEER Act for short — would eliminate the excise tax completely on the first 7,143 barrels produced in a year, which is about 2 million cans, since that’s how the Treasury Department defines a “small brewer” for tax purposes. More than 90 percent of brewers currently fall under that category.

For any subsequent barrels up until number 60,000, the excise tax would be halved from its current rate of $7 per barrel to $3.50. And for any subsequent barrels from numbers 60,001 to 2 million, the excise tax would be reduced from its current rate of $18 per barrel to $16.

What supporters say

The bills, S. 807 and H.R. 767, have attracted support from both sides of the aisle, from Republicans who want to eliminate taxes for their beloved small business, to Democrats who see the new system as a more progressive system of taxation than the current flatter rate.

Our tax policies shouldn’t discourage the growth and continued success of an industry that supports jobs for more than two million Americans, and it shouldn’t pick the winners and losers in the market,” House lead sponsor Rep. Steve Womack (R-AR3) said in a press release. “This comprehensive reform bill supports brewpubs, micro-brewers, national craft brewers, major brewers, and importers alike and encourages their entrepreneurial spirit, which is exactly the spirit we need to get America’s economic engine going again.

What opponents say

Opponents argue that the bill benefits large multinational breweries that don’t need the tax break, especially compared to another bill pending in Congress called the Small BREW Act which as its name suggests would benefit smaller breweries. However, that bill has about two dozen fewer House cosponsors than the Fair BREW Act, indicating its odds of passage may be smaller. Opponents also worry that the bill could run afoul of World Trade Organization free trade rules to which the U.S. is a party, because the bill would not apply to beer importers. The Brewers Association also estimated that the bill would cost $150 million in lost tax revenue.

The House bill introduced by Womack has 118 cosponsors, 65 Republicans and 53 Democrats, but hasn’t yet received a vote in the House Ways and Means Committee. The Senate bill introduced by Sen. Roy Blunt (R-MO) has five Democratic and four Republican cosponsors, though it hasn’t yet received a vote in the Senate Finance Committee.

This article was written by GovTrack Insider staff writer Jesse Rifkin.