United States of America: Reduced excise taxes for domestic but not imported micro-brewery beer

Measure #2156 | Published 12 Mar 2011 ▲


      Senator John Kerry (Democrat of Massachusetts) and a bipartisan group of 18 other senators have introduced a bill that would reduce excise taxes on beer that is brewed in small breweries in the United States. Designated as S.534 and introduced on March 9, 2011, the Brewer’s Employment and Excise Relief (BEER) Act would extend this relief only to domestic producers and not to imported beer.
      Imports of beer (item 2203.00.00 of the Harmonized Tariff Schedule) are duty-free on a most-favored-nation basis but are subject to an excise tax. As administered by the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Department of the Treasury, the excise taxes on both domestic and imported beer are set at either 5¢ per can or $18.00 per 31-gallon barrel. A reduced rate of 2¢ per can or $7.00 per barrel is imposed, however, on first the first 60,000 barrels for brewer who produces less than two million barrels per year. The law that provides for this reduced rate (Section 5051(a)(2) of Title 26 of the U.S. Code), which has been in effect since 1976, explicitly provides that a beneficiary of this lower tax rate must “brew or produce the beer at a qualified brewery in the United States.”
      The BEER Act would expand upon this preference for smaller domestic producers by reducing the lower rate to $3.50 per barrel. It would also increase the ceiling from two million barrels to six million barrels. The sponsors believe that these changes would help approximately 1,525 U.S. breweries by providing tens of millions of dollars per year in tax relief.
      In 2010 the United States imported $3.5 billion worth of beer from 78 countries. Imports from 48 of those countries amounted to less than $1 million each.
      The bill has been referred to the Senate Finance Committee, which has jurisdiction over both taxes and trade. Senator Kerry and six of the other co-sponsors are members of this committee.

Any Evidence-Based Deliberation:

Question Result
Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? No
Is there any evidence that alternatives to the proposed measure were considered? No
Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? No
Was such evidence identified? No
Is such evidence publicly available? No
Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? No
Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? No
Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? No
Did the government state its intention to review the measure within one year of implementation? No


See the hyperlinked material in the description.

Government Response:

Glossary of trade terms