Bills to brew up business

In 2009, Kettlehouse Brewing expanded from its original Myrtle Street location, opening a new taproom, brewery and canning operation on N. First St. Now, just five years later, Kettlehouse is looking to grow again.

To accommodate production that will likely reach 15,000 barrels of beer this year, compared to just 4,000 barrels in 2009, Kettlehouse co-owner Tim O’Leary is studying expansion to a third location. With the new location will come new jobs, increased purchases of Montana-grown barley and increased revenue for state and local government.

The Kettlehouse growth is exactly what some members of Congress are hoping to encourage with two bills currently under consideration. Both proposals would cut excise taxes on beer, and both are supported by Sens. John Walsh and Jon Tester.

Beer producers currently pay excise taxes and generally pass the cost on to consumers. The BEER Act would cut the tax in half for all brewers. The Small BREW Act would apply only to smaller brewers, halving the tax on the first 60,000 barrels produced and reducing the tax from $7 to $5 on all barrels after that up to 2 million. All of Montana’s 46 breweries would qualify under the Small BREW Act.

Last week, Walsh joined 45 other senators, including Tester, as a cosponsor of both bills, which were first introduced last year. Walsh also recently announced the formation of a Senate Small Distillers Caucus and expressed his support for the Distillery Excise Tax Reform Act, which would reduce excise rates on spirits from $13.50 to $2.70 for the first 100,000 proof gallons produced.

In a statement, Walsh explained his support for this pro-alcohol legislation, saying that “reducing the overhead costs will allow small business owners to invest in this emerging industry, creating good jobs across Montana.”

Montana Rep. Steve Daines, who is challenging Walsh for his Senate seat, hasn’t decided if he will support either bill. According to a spokesman, Daines “is studying these measures closely and seeking input from different Montana industry stakeholders.”

O’Leary, for one, points to a 2007 cut in state excise taxes for small brewers as evidence of the potential for these bills to generate growth. That cut coincided with an increase in craft beer production and hiring at breweries across the state, including Kettlehouse. O’Leary thinks the same would happen this time and says the savings he’d incur from passage of the Small BREW Act would “help with salaries for sure” as Kettlehouse continues to grow.

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