Taxes on Tap
Taxes on tap
By Gary Corbin
Suppose you were among the political leadership of your state, and a group of entrepreneurs walked into your office with a proposal. How would you respond?
“We want to start a new industry here, one that will help put your state on the map. It’ll be clean, draw visitors, create almost 4,000 new jobs and indirectly help create 10,000 more. We’ll obey every law and pay every tax that every other business in the state pays, plus an excise tax on top of that. All we want you to do is leave us alone.”
This is, in hindsight, what Oregon microbreweries could have said to the state’s leadership 23 years ago. Until recently, the state’s response was: “Wow. Good idea!”
Then, the 2007 Legislature came up with a really bad idea. Luckily, they seem to be on a smarter path again — for now.
As initially drafted, House Bill 2535 would have increased taxes twelvefold on brewers producing more than 200,000 barrels per year — meaning Widmer Bros. Brewing and MacTarnahan’s Brewing Co., and in the not-too-distant future, Deschutes Brewery.
That would have cost these breweries millions of dollars annually and could have sent our most successful craft-brewing locals scurrying for Washington-based premises. The result would have been a weaker Oregon beer industry, and a lot less revenue for the state — maybe even a net loss.
The size of the tax increase would be remarkable, to put it mildly. Oregon, now fourth-lowest in beer taxes in the U.S., would zoom to the highest, beating Alaska by 4 cents per gallon.
A state that has gained a strong reputation for great beer by nurturing the industry with relatively low tax rates would, in one fell swoop, turn into one that punishes one of its famed boutique industries.
Compare beer to the other alcohols and the change is even more amazing. On a per-glass basis, wine is taxed at three times the rate of beer (2.6 cents vs. 0.8).
Under the new rate, beer would be taxed 10.4 cents per glass, more than four times the rate of wine. Spirits, at 8.75 cents per glass, ironically would become a relatively “cheap” drink, taxwise.
What’s driving the desire to tap beer as a new revenue source is twofold. First, legislators feel pushed around by the beer and wine distributors lobby. After the mini-scandal involving all-expense-paid junkets last session, more than a few legislators want to “get back” at the lobbyists who walked away unscathed while elected officials took a beating in the media, and for some, in the polls.
Second, throw in a new activist majority, hungry after 16 years out of power and needing money to finance it, and you have what legislators might call a “taxable opportunity.”
Luckily, our friends in the industry, using impressive research by the Oregon Brewer’s Guild, were able to communicate their concerns to the sponsoring legislators.
The current version of the bill exempts those selling fewer than 125,000 barrels per year in Oregon — i.e., Oregon craft brewers — and, much more appropriately, takes on the big national producers and distributors.
That could help local craft brewers by pushing the price of big out-of-state beers higher — as much as a dollar per six-pack. The narrowing price differential might encourage the casual beer drinker to try something new and local.
It’s not clear if this proposal will become law. As of this writing, HB2535 is stuck in committee, and anything can happen there.
Therefore, Oregon craft brew fans must remain vigilant. To paraphrase Mark Twain, “No man’s beer is safe while the Legislature is in session.”
BEER NEWS:
BEER WINNER
Congratulations Andrew Stromberg from Vancouver, Washington! Winner of a $25 Gift Certificate from F.H. Steinbart and a free beer brewing class! Andrew entered at F.H. Steinbart Company at 234 SE 12th Ave. Call 503-32-8793 for information on brewing classes and directions.
ATTENTION HOMEBREWERS!
The Sasquatch Homebrewing Competition is now accepting entries for 2007. The competition is open to home brewers in Washington, Oregon, and Northern California. For entry instructions and additional information, visit http://www.sasquatchbrewfest.org/homebrew.html.
MCMENAMINS 2007 BREWFEST SCHEDULE
From the good-natured contention of Hillsdale's Battle of the Belt to the frolicking noncompetitive brew exhibition at High Street Brewery in Eugene, each of McMenamins' brewfests are one-of-a-kind. Food specials, brewery tours, kids' fun, live music, "beer-inspired" artwork and other special nuances punctuate our brewfests throughout the season. Every event, however, provides the perfect mixture of craftsmanship, camaraderie and fun – and you're always guaranteed a great beer. Get the full schedule at www.mcmenamins.com.
POSTPONED OPENING
The opening for the Full Sail Brewing Brew Pub in Hood River, OR has been postponed. According to Jamie Emmerson, Executive Brewmaster, “The Full Sail pub in Hood River is not ready to open yet. We do have a Chef hired for the kitchen (he's really into beer), and the kitchen drywall is up, but there have been some delays with the HVAC. So, instead of pushing too hard, and not wanting to steal Double Mountain's opening thunder (Charlie and Matt used to work for me, and I wish them all the best), we're going to target a later opening date.” Check the website for updates, http://www.fullsailbrewing.com/ (Full Sail Brewing, 506 Columbia St., Hood River, OR 97031, 541-386-2281)
From Belmont Station, This week's featured six beers:
Great big beers from a great big state:
Midnight Sun Conspiracy - Belgian-style Black Ale
Midnight Sun Sockeye Red - India Pale Ale
Midnight Sun Kodiak Brown - American Brown Ale
Midnight Sun Epluche-Culotte - Belgian Style Tripel
Alaskan Smoked Porter - Smoked Porter
Alaskan Stout - Oatmeal Stout
By Gary Corbin
Suppose you were among the political leadership of your state, and a group of entrepreneurs walked into your office with a proposal. How would you respond?
“We want to start a new industry here, one that will help put your state on the map. It’ll be clean, draw visitors, create almost 4,000 new jobs and indirectly help create 10,000 more. We’ll obey every law and pay every tax that every other business in the state pays, plus an excise tax on top of that. All we want you to do is leave us alone.”
This is, in hindsight, what Oregon microbreweries could have said to the state’s leadership 23 years ago. Until recently, the state’s response was: “Wow. Good idea!”
Then, the 2007 Legislature came up with a really bad idea. Luckily, they seem to be on a smarter path again — for now.
As initially drafted, House Bill 2535 would have increased taxes twelvefold on brewers producing more than 200,000 barrels per year — meaning Widmer Bros. Brewing and MacTarnahan’s Brewing Co., and in the not-too-distant future, Deschutes Brewery.
That would have cost these breweries millions of dollars annually and could have sent our most successful craft-brewing locals scurrying for Washington-based premises. The result would have been a weaker Oregon beer industry, and a lot less revenue for the state — maybe even a net loss.
The size of the tax increase would be remarkable, to put it mildly. Oregon, now fourth-lowest in beer taxes in the U.S., would zoom to the highest, beating Alaska by 4 cents per gallon.
A state that has gained a strong reputation for great beer by nurturing the industry with relatively low tax rates would, in one fell swoop, turn into one that punishes one of its famed boutique industries.
Compare beer to the other alcohols and the change is even more amazing. On a per-glass basis, wine is taxed at three times the rate of beer (2.6 cents vs. 0.8).
Under the new rate, beer would be taxed 10.4 cents per glass, more than four times the rate of wine. Spirits, at 8.75 cents per glass, ironically would become a relatively “cheap” drink, taxwise.
What’s driving the desire to tap beer as a new revenue source is twofold. First, legislators feel pushed around by the beer and wine distributors lobby. After the mini-scandal involving all-expense-paid junkets last session, more than a few legislators want to “get back” at the lobbyists who walked away unscathed while elected officials took a beating in the media, and for some, in the polls.
Second, throw in a new activist majority, hungry after 16 years out of power and needing money to finance it, and you have what legislators might call a “taxable opportunity.”
Luckily, our friends in the industry, using impressive research by the Oregon Brewer’s Guild, were able to communicate their concerns to the sponsoring legislators.
The current version of the bill exempts those selling fewer than 125,000 barrels per year in Oregon — i.e., Oregon craft brewers — and, much more appropriately, takes on the big national producers and distributors.
That could help local craft brewers by pushing the price of big out-of-state beers higher — as much as a dollar per six-pack. The narrowing price differential might encourage the casual beer drinker to try something new and local.
It’s not clear if this proposal will become law. As of this writing, HB2535 is stuck in committee, and anything can happen there.
Therefore, Oregon craft brew fans must remain vigilant. To paraphrase Mark Twain, “No man’s beer is safe while the Legislature is in session.”
BEER NEWS:
BEER WINNER
Congratulations Andrew Stromberg from Vancouver, Washington! Winner of a $25 Gift Certificate from F.H. Steinbart and a free beer brewing class! Andrew entered at F.H. Steinbart Company at 234 SE 12th Ave. Call 503-32-8793 for information on brewing classes and directions.
ATTENTION HOMEBREWERS!
The Sasquatch Homebrewing Competition is now accepting entries for 2007. The competition is open to home brewers in Washington, Oregon, and Northern California. For entry instructions and additional information, visit http://www.sasquatchbrewfest.org/homebrew.html.
MCMENAMINS 2007 BREWFEST SCHEDULE
From the good-natured contention of Hillsdale's Battle of the Belt to the frolicking noncompetitive brew exhibition at High Street Brewery in Eugene, each of McMenamins' brewfests are one-of-a-kind. Food specials, brewery tours, kids' fun, live music, "beer-inspired" artwork and other special nuances punctuate our brewfests throughout the season. Every event, however, provides the perfect mixture of craftsmanship, camaraderie and fun – and you're always guaranteed a great beer. Get the full schedule at www.mcmenamins.com.
POSTPONED OPENING
The opening for the Full Sail Brewing Brew Pub in Hood River, OR has been postponed. According to Jamie Emmerson, Executive Brewmaster, “The Full Sail pub in Hood River is not ready to open yet. We do have a Chef hired for the kitchen (he's really into beer), and the kitchen drywall is up, but there have been some delays with the HVAC. So, instead of pushing too hard, and not wanting to steal Double Mountain's opening thunder (Charlie and Matt used to work for me, and I wish them all the best), we're going to target a later opening date.” Check the website for updates, http://www.fullsailbrewing.com/ (Full Sail Brewing, 506 Columbia St., Hood River, OR 97031, 541-386-2281)
From Belmont Station, This week's featured six beers:
Great big beers from a great big state:
Midnight Sun Conspiracy - Belgian-style Black Ale
Midnight Sun Sockeye Red - India Pale Ale
Midnight Sun Kodiak Brown - American Brown Ale
Midnight Sun Epluche-Culotte - Belgian Style Tripel
Alaskan Smoked Porter - Smoked Porter
Alaskan Stout - Oatmeal Stout
posted by PDXBeer at 4:33 AM
1 Comments:
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