2beerguys beer blog

Beer Law: Wisconsin Beer Tax Proposal

Information provided by Brewingnews.com (with minor edits):

To Wisconsin Beer Lovers (and Friends),

In the unlikely event that you haven’t already heard, a bill has been introduced in the Wisconsin Legislature to increase the fermented malt beverages tax by 400%, from $2/barrel to $10/barrel. Granted, all of the (craft) breweries you probably enjoy pay a lower rate because they produce much less than 300,000 barrels per year. Their effective tax (for the first 50,000 barrels of production), is half that, but a 400% increase is a 400% increase.

Such a tax increase may not make a lot of difference in cost to you in the short run as a consumer (but also don’t believe the misleading couple pennies a bottle assertion made by tax advocates, because costs are multiplied as they go through the three-tier distribution system. Also don’t forget that beer–unlike just about any other food product–is already taxed three times, at the federal level, with the tax at issue here, and then the state and county sales tax on top of all that!

(Imagine the uproar if we taxed milk that way.)

But a tax increase could mean a huge difference for the survival of some of our state’s great small craft brewers who are already operating on the financial margins as they put pride in quality beer above financial profit. They can’t absorb a tax increase as easily as the macrobrewers, and as they pass along the resulting cost increases to the consumer–and with those increases multiplied through the distribution chain–even a relatively small price increase of $2/case, particularly in this economy, might be the straw that breaks the camel’s back, and some consumers may be encouraged to “trade down” to craft beer look-alikes from the out-of-state macrobrewers.

That’s bad for Wisconsin craft brewers and their employees. And craft brewers going out of business ultimately means less selection for you and less great craft beer for which Wisconsin has been a national leader.

(But all that’s just my personal opinion.) Attend Tuesday’s hearing on 2009 Assembly Bill 287, listen to the opinions of others, and perhaps voice your own.

Bob Paolino,
GLBN
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The basic facts and sources:

2009 Assembly Bill 287: Click Here.

Hearing notice: Click Here.

Current law (Section 139.02, Wisconsin Statutes): Click Here.

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Craft brewers presented their positions at the legislative hearing on Tuesday on a bill to increase
Wisconsin’s fermented malt beverage tax. Watch archived proceedings on Wisconsin Eye (think of it as the C-SPAN for Wisconsin state government) at Click Here.