This is good news, by all accounts and appearances. The Craft Beverage Modernization and Tax Reform Act (CBMTRA) is about to become law. Basically, this makes a temporary tax relief initiative a permanent change to the federal tax rate.
The CBMTRA was included in the year-end omnibus and COVID relief packaged agreed on by Congress and is expected to be signed into law directly.
More information about this, and about other elements of the COVID relief package as it pertains to breweries, is available here. Whatever good and bad there is about the overall package, at least it offers some relief opportunities for the small businesses we all love.
COVID Relief
Beyond the tax rate, here are just a few of the COVID relief highlights:
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- $284 billion for first and second PPP loans, and $20 billion for the Economic Injury Disaster Loan (EIDL) grants for low-income communities.
- Allowing the hardest-hit small businesses to receive a second forgivable PPP loan. Eligibility would be limited to small businesses with 300 or fewer employees
- Businesses that received PPP loans and had them forgiven will be allowed to deduct the costs covered by those loans on their federal tax returns, consistent with congressional intent in the CARES Act.
There is a lot more information here. Also, know that the Brewers Association continues to advocate for the craft beer industry.
Tax Relief
See our most recent story about this tax rate issue. In the simplest terms, a temporary reduction to the brewers’ federal excise tax rate was set to expire at the end of 2020. If the CBMTRA had not passed, most craft breweries would have faced a drastic increase in their federal tax bill. Think, a 100-percent increase. The industry has been working for some time to make the reduced rate the permanent rate.
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Here is a message from the Washington Brewers Guild about the passage of the CBMTRA:
Some great news out of DC to start this week: The Craft Beverage Modernization and Tax Reform Act (CBMTRA) is included in the year-end omnibus and COVID relief package agreement that is poised to clear congress and be signed into law, imminently.
With the pending passage of this legislation, the current reduced federal beer excise tax rates will be made permanent! Not only will brewers not see federal excise tax rates increase by 100% at the beginning of 2021, small and independent brewers will now have peace of mind that the recalibrated rates are permanent and not subject to yearly renewal efforts.
Thank you to everyone out there who has contributed to this effort by engaging your members of congress, responding to our many calls to action, and to those of you who have traveled to DC over the years in efforts to get this important tax reform for small brewers!
We want to send a big thank you and acknowledgment to the Brewers Association for all of their excellent work and leadership securing tax relief for our nation’s brewers. If you are not yet a member, we encourage you join now, as their work is more critical than ever.
Here’s a full federal update, including important information on the agreed upon COVID relief package, from Brewers Association Federal Affairs Director, Katie Marisic.
We will continue to closely monitor movement toward passage in DC and provide any new info as it becomes available.
