It’s no surprise that craft breweries are a big deal in the Pacific Northwest. But they’re also big business.
In 2014, Washington craft breweries brought in more than $1.6 billion. The state ranks second in the nation, only behind California, for the highest number of breweries. Thirty-three of them are in Washington Congresswoman Jaime Herrera Beutler’s district.
The Republican from Southwest Washington sipped on a raspberry gose-style ale as she toured Vancouver’s Ghost Runners Brewery and hosted a roundtable discussion with other local craft brewers.
Herrera Beutler is backing the Craft Beverage Modernization and Tax Reform Act, a bill that would cut federal taxes for craft breweries, wineries and cider makers. For beer makers, the federal excise tax on the first 60,000 barrels of beer would be reduced by half. Instead of paying $7 per gallon of beer, the tax rate would drop to $3.50.
“[Local craft breweries] are taxed on a higher scale than those who produce more,” Herrera Beutler said. “So why not give them the ability to reinvest that money on the front end so they can grow?”
Many applauded the industry’s quick growth, but bemoaned long wait times for licensing and tax approvals.
“It’s confusing. When I first opened, I didn’t know where to start,” said Ghost Runners Brewery co-owner and founder, Jeff Seibel. “The whole approval process is a real challenge.”
Seibel is preparing to open a second location next summer. The 5,000 square-foot brewpub will be one of the first establishments to open on the much-anticipated Gramor development overlooking the Vancouver waterfront.
Opening a new location has meant Seibel has to go through the permitting process again. In addition to paying state taxes, every brewery in the country must be licensed through the federal Alcohol and Tobacco Tax and Trade Bureau, also called the TTB. Seibel says the current wait time he was quoted for TTB approval is 140 days.
“Some of the biggest hurdles breweries are facing are what I hear from a lot of small businesses: government red tape, wait times,” said Herrera Beutler. “The bill that I’m co-sponsoring on would help change that and be helpful to this emerging economy here in Southwest Washington.”
According to the Washington Brewer's Guild, more than one third of Washington craft breweries opened in the last three years.