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Tax break that helps craft breweries to expire if Congress doesn’t act

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WASHINGTON (Nexstar) — In recent years we’ve seen the craft beer industry grow from a handful of breweries in major cities to thousands of smaller, artisanal breweries spread across all 50 states. 

Brewers said the Craft Beverage Modernization and Tax Reform Act (passed in 2017) has helped with that growth. But those tax breaks expire this year, and advocates want Congress to act fast.

Leah Cheston and her husband own Right Proper Brewing in Washington D.C.

“Our flagship is called “Raised by Wolves,” which is an aromatic pale ale. We brew all kinds of stuff,” Cheston said.

Cheston is one of nearly 7,000 craft brewers in the United States, who along with beer lovers, raised a glass after Congress passed the Craft Beverage Modernization and Tax Reform Act 2 years ago.

Jim McGreevy with The Beer Institute said it reduced the federal excise tax for brewers and aided the industry’s explosive growth.

“Allowed them to spend the money innovating in their brewery, rehabbing their physical plants, building out their physical plant,” McGreevy said.

Cheston said she was able to hire a new part-time employee. But the two year tax break runs out at the end of 2019. Supporters urge Congress to extend it or make it permanent.

“If it would go back to the old, higher rate it would be disruptive to our business,” McGreevy said.

A recent study shows the craft beer industry contributed nearly $79 billion to the U.S. economy in 2018.

Cheston said if Congress fails to act, taxes could nearly double and go up at many breweries by $10,000 dollars or more. If that happens,  prices could go up and staffing could go down.

Supporters said the tax relief could provide stability to the craft beer businesses,  its workers and their communities.

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