Gerlach calls for cutting federal beer tax to help Pennsylvania brewers compete and continue creating jobs

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Washington, Mar 30, 2011 | comments

Congressman Jim Gerlach (PA-6th District) has introduced bipartisan legislation that would cut in half the federal excise tax on a barrel of beer produced by 102 of Pennsylvania’s craft and small breweries.

The proposed Small Brewer Reinvestment and Expanding Workforce (BREW) Act would reduce the tax on the first 60,000 barrels small breweries produce each year to $3.50 per barrel from the current $7 per barrel rate.

“With the economy sputtering, Congress must create conditions that allow small businesses to become more competitive, protect existing jobs and create new employment opportunities,” Gerlach said. “This legislation would be a major boost to some of Pennsylvania’s most innovative small businesses. In addition to producing world-class products, small brewery owners provide paychecks to thousands of Pennsylvanians. And many of these companies are engaged in community revitalization and other civic activities that enhance the quality of life in the neighborhoods where they are based.”

The legislation introduced along with Congressman Richard Neal, a Massachusetts Democrat, would define small breweries as those producing less than six million barrels per year. In addition to a 50 percent reduction in the rate on the first 60,000 barrels, small breweries would get a $2-per barrel tax cut for beer production between 60,000 and 2 million barrels per year. That rate would fall to $16 from $18.

Iron Hill Brewery, McKenzie Brew House No. 2, Prism Beer, Sly Fox and Victory Brewing Company are a few of the small brewers in the 6th District that would receive tax relief, under the legislation.

Bill Covaleski, Brewmaster and President of Victory Brewing Company based in Downingtown, said the legislation would be a big help to small American manufacturers that often struggle to succeed in a daunting economic climate.

“Lowering the federal excise tax would allow Victory to add to its current team of 185 talented and dedicated employees and continue making vital reinvestments in the great community we call home,” Covaleski said. “This legislation represents an investment in American job growth with a delicious upside for all.”

Brian O'Reilly, Brewmaster of Sly Fox Brewing Company in Royersford, said the legislation would help the business continue to grow and add to its payroll.

"Sly Fox Brewing Company has grown 781% in the last 6 years and added more than 40 jobs," O'Reilly said. "The Federal Excise tax credit would help Sly Fox to continue to reinvest in its growing business. If this tax relief had been in place last year, Sly Fox could have used the money it saved on taxes to buy 508 stainless kegs. These kegs would have helped Sly Fox package more beer, expand their market and add jobs."

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