Montana breweries and distilleries get tax relief from Congressional spending package

HELENA — Now that President Donald Trump has signed a $2.3 trillion COVID-19 relief and government funding package, Montana breweries and distilleries will receive some much-needed tax relief.

The Craft Beverage Modernization and Tax Reform Act was incorporated into the year-end legislative package. It makes a reduced tax rate on small brewers and distillers permanent, after it was initially approved for two years, then extended for one more.

U.S. Sens. Jon Tester and Steve Daines both co-sponsored the bill and supported adding it to the spending deal.

If the CBMTRA had not been passed, excise taxes on small breweries would have increased from $3.50 to $7 per barrel on Jan. 1. For distilleries, the taxes would have jumped by 400%.

Matt Leow, executive director of the Montana Brewers Association, said the state’s brewers produce 200,000 barrels of beer per year. That means they would have had to pay a total of $800,000 more in taxes without the extension.

“Receiving a tax hike on Jan. 1 would be tough in any normal year, but with the industry struggling to get through the pandemic and its fallout, it would have been a horrible time for the industry to see our taxes double,” he said.

Leow said people may think breweries are doing all right because of reports that alcohol sales have gone up during the pandemic. However, he noted that many Montana breweries aren’t selling their products at grocery stores – and even those that are don’t make as much profit on cans as they do from taproom sales.

The spending package also included nearly $300 billion more for the Paycheck Protection Program, which Leow said Montana breweries had also benefited from. He thanked Congress for the relief they approved.

“We’re expecting a tough winter, so the timing of this relief is vital,” he said. “We’re really worried about the ability of these businesses to survive this winter, so the tax break combined with the COVID relief – without it, I don’t know if some of these breweries would make it, quite frankly.”

Leow said many breweries are doing takeout sales. He urged the public to keep supporting those businesses.