FOR IMMEDIATE RELEASE: January 21, 2014
SCHUMER VISITS PEARL STREET BREWERY & JOINS GROUP OF BUFFALO BREWERY OWNERS TO PUSH FOR BILL THAT WOULD CUT EXCISE TAX ON SMALL BREWERIES BY 50% – BILL WILL HELP BOLSTER FAST-GROWING CRAFT BREW INDUSTRY IN BUFFALO
Today, at Pearl St. Grill & Brewery in Buffalo, U.S. Senator Charles E. Schumer announced that he is joining more than 20 bipartisan colleagues to fight for legislation that will cut the excise tax on small breweries in half, helping small brewers in Erie County reinvest in their business, hire new employees, and revitalize downtown communities. The Buffalo area has seen a rise in the craft brewing industry in recent years, and Schumer’s effort aims to bolster that. Currently, brewers pay a $7 excise tax for the first 60,000 barrels they brew per year. Under the Small BREW (Brewer Reinvestment and Expanding Workforce) Act, that rate is slashed to $3.50 per barrel, resulting in potential savings of $210,000 per year for that brewery. The bill also cuts the tax by $2 on the next 1,940,000 barrels produced, resulting in potential savings of $3,880,000 each year.
“Small breweries throughout Buffalo, like Pearl Street Grill and Brewery, not only brew great beer, they also pour jobs into the community,” Schumer said. “By cutting taxes for these small businesses, we can help breweries buy new equipment and hire more people to boost business, and truly allow them capitalize on the growing craft beer culture in Western New York. Breweries are the crown jewels of so many of our communities, and many of them bring an added benefit by renovating charming old buildings in downtowns, just like Big Ditch Brewing is doing on Ellicott Street. Putting more money back into these businesses will be good for economic development, good for jobs, and good for Upstate New York.”
Schumer joined Earl Ketry, owner of Pearl St. Grill and Brewery and Pan American Brewery; Ethan Cox, owner of Community Beer Works; Tim Herzog, owner of Flying Bison Brewing Company; Jeff Ware, owner of the soon-to-be opened Resurgence Brewing; Matt Kahn, owner of soon-to-be opened Big Ditch Brewing, and other local brewery owners.
“Senator Schumer's legislation not only gives a boost to our business, it also helps lift the entire Buffalo economy. Every dollar we can save in federal excise tax we can reinvest in hiring more employees and growing our business,” said Earl Ketry, Owner of Pearl St. Brewery & Pan American Brewery.
“As small business owners, breweries are in a capital intensive business. The equipment is expensive, employees must be specifically trained to work in a brewery, and a fresh brewing ingredients can break the budget. What you add sales tax and excise tax on top of that, it's tough to keep the doors open. The small brewers of New York State are grateful for Senator Schumer's support in trying to lift some of the financial burden. Money saved from excise tax reduction goes right into job creation and machinery purchases that allows us to expand and grow our business,” said Tim Herzog, owner of Flying Bison Brewery.
"As a start-up brewery we have limited resources. Cutting the excise tax would put money back in our pocket that we can spend on equipment and staff. This is what we need to grow our business,” said Jeff Ware, owner of Resurgence Brewing.
Senator Schumer joined Senator Ben Cardin (D-MD) and colleagues on both sides of the aisle in support of the Small BREW Act, which would make any brewery that brews fewer than 6 million barrels of beer per year eligible for the tax cut that will allow brewers to reinvest in workers, new equipment and new space as they expand their business. This tax cut would save small brewing companies over $17 million nationwide this year.
The approximately 2,400 small and independent breweries across the country combine to generate more than $3 billion in wages and benefits, and pay more than $2.3 billion in taxes annually. In New York, the beer industry directly supports approximately 8,000 jobs through brewing and distribution, and nearly 60,000 jobs overall when retail sales are factored in. These jobs paid $2.1 billion in wages in 2010, and accounted for $5.3 billion in economic activity. A Harvard study of the proposal predicts that passage of the proposal would increase economic activity in the small brewery sector by $153 million in the first year and almost $865 million over the first five years. Every dollar saved by cutting the excise tax would result in nearly $11 dollars in economic activity, providing an immediate and substantial boost to the economy. According to the study, the proposal would generate over 5,200 new jobs in the first year, and an additional 400 jobs going forward annually.
Schumer released the following chart of breweries in the Buffalo-area that can expect to save $3.50 in taxes on each barrel of production under Schumer’s legislation. He explained that as breweries increase production, so too does the amount they’ll save in excise taxes: