If your brewery hands its spent grain off to a local farmer, as many breweries do, you already know the drill. You pay to store it, handle it, and sometimes haul it, and the thanks you get is a happy cow or maybe an annual pig roast party. A bill in Congress would change that and offer a tangible reward.
The Brews to Barns Act (H.R.10877) was recently introduced in the House of Representatives. It would give breweries a federal excise tax credit of 8 cents for every pound of spent grain donated for agricultural use, up to $35,000 a year. The Brewers Association (BA) estimates the credit could return up to $38 million annually to small and independent craft brewers, a welcome break at a time when rising costs and a tough market are squeezing margins.
How it works
The credit is a direct reduction in the federal excise taxes a brewery owes, not a deduction from taxable income. It’s also capped at a brewery’s excise tax liability, so it can bring what you owe down to zero but won’t send you a check beyond that. A credit, not a rebate.
The BA offers a few examples, even if they are perfect -world scenarios. At the reduced federal excise tax rate of $3.50 per barrel, a brewery making 2,500 barrels a year would owe $8,750. If it donates all of its spent grain for qualifying agricultural use, it could generate enough credits to wipe out that bill entirely. A 5,000-barrel brewery could save as much as $17,500 a year, and larger breweries could save up to the $35,000 cap.
Why it matters
Nobody is asking breweries to change how they operate. The BA estimates that about 90% of the spent grain produced by American breweries is already reused, mostly as livestock feed. The biggest brewers often have the volume and infrastructure to sell their grain commercially, but smaller breweries usually don’t. They give it away and absorb the costs. The bill would put a little something back in their pockets and strengthen the brewer-farmer partnerships that already exist in so many communities, including here in Washington.
What you can do
The BA says it is gearing up for a grassroots push to get members of Congress to cosponsor the bill. In a notice to members, the association said breweries “should anticipate imminent launch of a grassroots write-in campaign.” It also said that sharing “firsthand examples of spent grain partnerships and explaining how the proposed tax savings could benefit their businesses will be particularly valuable” as the BA works to move the legislation forward.
Brewers can use the BA’s online calculator to estimate their own annual savings. The BA says it will keep working with the bill’s bipartisan sponsors to build support in Congress.
The Washington Beer Blog will follow this story and provide more information and direction when available. Watch this space.
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