A small part of the 2017 Trump tax cut is due to expire soon, and if it does, it’s likely going to hurt craft breweries in our region and elsewhere. It’s the Craft Beverage Modernization and Tax Reform Act.
Green Empire Brewing is a small-scale craft brewery based in a garage at Fort Ethan Allen in Colchester.
“Three, four years ago, we started homebrewing, and we’ve been legal (commercially) for two years now,” co-owner and co-brewer Evan Vacarr said.
They just opened for retail sales, with limited hours, about a month ago.
Because of the 2017 Tax Cuts and Jobs Act, the federal excise tax on every barrel they produce is half of what it once was.
“The tax went from $7 a barrel to $3.50 a barrel,” Vacarr said, adding that Green Empire should end up making about 500 barrels this year.
At that level of volume, the tax cut hasn’t had a huge impact on the business, but there’s still enough of one for Vacarr to notice.
“We’re getting a free month of rent, if you do the math,” he said. “Every little bit helps on our end.”
The craft beer tax cut is due to expire at the end of the year. Supporters are urging Congress to extend it or make it permanent.
While it may not make a big difference to Vacarr’s bottom line now, he says it likely would if it’s renewed for another year or two. That’s because he expects Green Empire’s production to at least double next year.
“When you look at it at that scale, you’re in the thousands of dollars, and just moving forward down to year three or year four, it would be in the tens of thousands of dollars, so it would be huge for us,” he said.
Huge enough to help keep the wells — or, in this case, the fermentation tanks — from running dry.
Last year, Vermont craft breweries produced more beer per capita than any other state — 21 gallons for every Vermonter of legal drinking age. That’s according to the Brewers Association, a beer industry trade group.