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May 13, 2013

Collins, King back craft beer tax break

U.S. Sens. Susan Collins and Angus King are backing a bill that would reduce excise taxes on small brewers, which an industry representatives said would be a boon to Maine's 36 small and craft breweries.

Collins is the author of the bill, which would raise the production limit for brewers to still qualify as "small" as well as lower excise taxes for those brewers. The size definition, which was last updated in 1976, defines small brewers as those producing under 2 million barrels a year; Collins' bill would increase that annual production limit to 6 million barrels.

Small brewers now pay $7 per barrel for the first 60,000 barrels brewed and other brewers pay around $18 per barrel in excise taxes.

The bill would reduce that tax to $3.50 per barrel on the first 60,000 barrels and $16 on additional barrels up to 2 million a year.

Daniel Kleban, president of the Maine Brewers' Guild and owner of the Portland-based Maine Beer Co., said in a prepared statement that demand for craft beer in Maine continues to grow and that reduced excise taxes would help those breweries expand.

A study by Harvard economist John Friedman estimated the bill would generate around $153 million in economic activity in the first year.

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