Another tidbit buried in the new tax law is an excise tax on beer, effective 1/1/2018. Now before you go all Boston Tea Party on this, read further. Under the new law, there is to be an excise tax on beer at the rate of $16 per barrel. This applies to domestic and imported beer producers who produce in excess of 2 million barrels annually.However, for domestic producers who produce less than 60,000 barrels annually the tax is only $3.50 per barrel. There is a $7 rate in between, but bear with me for a moment. The little guy gets a break.
So let’s distill this down to what it means to the average Joe Sixpack. If there are 31 gallons of beer in a barrel, and 128 ounces in a gallon (I had to look that up too), with the average bottle of beer being 12 ounces, that equates out to a whopping five cents per bottle at the higher rate, and only one cent for the small brewers.Now, I admit I didn’t retain much from my year of economics classes in school. But I do recall that all business excise taxes are ultimately born by the business’s customers. Therefore this new tax ultimately hits drinkers of big production brews for a nickel a can, but if you are inclined to support microbreweries and craft brewers, you’ll only pay one penny a pop to do it, and you’ll be drinking better beer! So put down that can of Bud Lite, pick up a bottle of Ritual Red Ale, and you’ll be paying less in taxes. Be sure and have plenty on hand in April too – it might make writing tax checks a bit easier.
BTW – I made a misleading statement in yesterday’s Blog (my 100th published blog!) about tax credits. The California scheme would entitle you to a California tax credit and a Federal deduction, not federal for both. Sorry if I confused you.