DERRY — New Hampshire craft beer makers hope Congress will extend a reduction in the excise tax on craft beer sales and make it permanent, brewers told Sen. Maggie Hassan, D-NH, on Monday.
Hassan visited Rockingham Brewing Co. in Derry, where she met with brewery owners Ali and Rob Leleszi; Jenn “CJ” White, the executive director of the New Hampshire Brewers Association; and Jeff Cozzens, the association’s president and the CEO of Schilling Beer Company in Littleton.
They discussed efforts to extend and make permanent a reduction in the excise tax on craft beer sales. The provision was first codified into law when language from the Craft Beverage Modernization and Tax Reform Act was adopted in the 2017 tax reform law, halving the $7-per-barrel tax to $3.50.
That tax cut was set to expire at the end of 2019 but was renewed for one more year as part of a government funding bill signed into law.
The tax cut could become permanent with the passing of the full craft beer modernization bill. While the bill has 73 senators and 336 House co-sponsors signed on, there’s no guarantee that it will make it to the floor, or get attached to any of the major bills getting voted on this session.
“The craft beverage tax cut extension that I helped get signed into law last year will help our breweries continue to grow, and I’m committed to working across the aisle to make these tax cuts permanent,” Hassan told the Union Leader.
Ali Leleszi told Hassan she estimates the tax cut helps Rockingham Brewing Co. save about $3,000 each year. While that may not be enough money to invest in new equipment — their brewing tanks alone cost about $150,000 — it could go toward hiring a sixth employee to help with some front-end coverage or events.
“We just put it right back in our business,” Leleszi said.
Cozzens said raising or lowering the excise tax also has trickle-down effects on philanthropy, as many small brewers give back to their communities. Rockingham Brewing, for example, just relaunched its annual Remy’s Double IPA, which is named after the owners’ dog. A percentage of the sales, based on Remy’s age (8% this year) goes to a local animal shelter.
The beer industry in New Hampshire is a $450 million economic driver that brings more young people to the state and has become part of the social and cultural fabric, Cozzens said.
The number of craft brewers grew from 17 in 2013 to about 90 today, Cozzens said. Still, he said, the state liquor commission needs to make some institutional changes so the local craft brewery scene can better compete with states where brewers don’t face some of the same regulatory hurdles.
On the federal side, Cozzens said he hopes to see the requirements for obtaining Certificate Of Label Approvals (COLAs) revamped, saying the current system is overly complicated.
“It can be needlessly cumbersome,” Cozzens said.
Cozzens and White also told Hassan that they would like to see better funding for the Alcohol and Tobacco Tax and Trade Bureau (TTB), and prevent a repeat of the kinds of delays brewers and distillers faced during the last government shutdown, where barrels of beverages awaiting label approval from the TTB were unable to go to market for weeks.
They said tariffs on aluminum can even have residual effects on aluminum can prices.
White also said the New Hampshire Brewers Association is interested in seeing an investment in hops and barley research to increase domestic production. She said that is of growing concern after many hop crops in Australia were lost in the recent wildfires there.