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Accuracy • Independence • Integrity

September 19, 2017   |   Ithaca, NY

News

Small breweries get tax cut

Local microbreweries may get a leg up with a new act making its way through the Senate.

On March 9, Sen. Chuck Schumer of New York and Richard Burr of North Carolina announced their backing of the Brewers Employment and Excise Relief Act of 2011.

If passed, the act would support a $67 million tax break for microbreweries nationwide.

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Brian Fuller, bottling line operator, bottles beer yesterday at Ithaca Brewing Company. An act proposed in the Senate would give the brewery a tax break. KEVIN CAMPBELL/THE ITHACAN

Under this act, any brewery that brews fewer than 6 million barrels of beer per year is eligible for the tax break. It would allow brewers to reinvest in workers and new equipment as they expand their businesses.

In a press release, Schumer said breweries are the “crown jewels” of many communities in upstate New York, and putting more money back into breweries will be good for the state’s economic development.

“Small breweries throughout upstate New York not only brew great beer, they also create great jobs,” Schumer said.

Schumer visited the Ithaca Beer Company in February to discuss the implications of the BEER Act and the ways it would benefit the company.

Dan Mitchell, founder of the Ithaca Beer Company, said if the bill was passed, it would cut the federal tax on each barrel that he produces in half.

“It puts money back into the company which allows us to do a variety of things to control the growth of the company,” Mitchell said.

This would allow Ithaca Beer Company to add capacity by purchasing tanks, support the brand better in the market, hire more people and pay employees a higher salary.

Mitchell said the price of beer would only be reduced by about a quarter per case.

“It’s not that significant an amount that it would change the price customers pay,” he said.

Senior Sara Leonard, who works at Ithaca Beer Company in the front tasting room and gives tours on the weekends, said the act would help the company hire more workers and lighten the load of current employees.

“We can probably invest in two to three more workers here,” she said. “It gets really busy, so just having an extra hand to take over certain days or to help in general is always a good thing.”

Leonard said the money would be directly invested into the paychecks of the employees, who are already paid more than minimum wage, and reinvested in the company.

“On top of everything that is going to help individual workers, it’s also going to go right back into Ithaca,” she said.

Chris Ericson, owner of the Lake Placid Pub and Brewery, said the impacts of the act on his business would be enormous.

“It is real cash which would be available for new equipment or new employees,” he said. “We would probably get two tanks instead of one in our upcoming expansion.”

Mitchell said the act would strengthen the industry as a whole by allowing small manufacturers to compete with larger manufacturers.

“Its not an unfair advantage to small brewers because we are so small,” he said. “You are talking about us doing 10,000 barrels versus Budweiser doing 200 million barrels. It’s a much different dynamic.”