There are 73 breweries in Montana, with 12 more set to open this year, and that means beer is not only popular for consumers here but is an important component of the Treasure State’s manufacturing industry.
That’s why Sen. Steve Daines, R-Mont., spent Tuesday and Wednesday touring breweries and other small businesses across the state in an effort to tout the federal tax reform bill, called the Tax Cuts and Jobs Act, which was passed by Congress and signed into law in December.
Part of that legislation was the Craft Beverage Modernization and Tax Reform Act, which was cosponsored by Daines and Sen. Jon Tester, D-Mont., and took effect Jan. 1 for two years. The bill reduces the federal excise tax on barrels of beer from $7 a barrel to $3.50 for the first 60,000 barrels for domestic brewers producing less than 2 million barrels annually.
At Big Sky Brewing in Missoula, the state’s largest brewery, nearly 40,000 barrels a year of Moose Drool, Space Goat and other craft beers are produced annually. Daines toured the facility Wednesday with Big Sky sales and events coordinator Joe Petrilli. Daines also visited Philipsburg Brewing Company in Granite County earlier in the morning as part of a larger tour of small businesses across western Montana.
“We’re second per capita for breweries in the nation,” Daines said. “So the excise tax fell by 50 percent, combined with the rate cuts for small businesses, and just chatting with folks here at Big Sky it’s a significant six-figure kind of savings for them, a few hundred thousand dollars a year. I asked them, well, what are you going to do with that? They said, well, two things: Continue to invest in our equipment and (our) employees, specifically higher bonuses for employees.”
Daines said that’s “good news” for Montana.
“We’re seeing that continuous theme at businesses across Montana,” he said. “Business optimism is higher. I visited a lumber mill yesterday (in Thompson Falls) where they said they are going to announce a dollar an hour increase for employees, and that’s directly because of the tax bill.”
A poll conducted by the news organization Politico and the polling firm Morning Consult recently found that just a quarter of registered voters surveyed have noticed an increase in their paycheck since the tax bill was passed, and 51 percent say they have not. The poll also found that self-identified Republicans are more likely to say they have seen a larger paycheck under the new law, 32 percent, compared to Democrats at 21 percent or independents at 22 percent.
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“Our polling shows high-income earners are more likely to have noticed an increase in their paychecks as a result of the tax bill," said Kyle Dropp, Morning Consult’s co-founder and chief research officer told Politico. “For example, 40 percent of voters who earn more than $100,000 said they have noticed a pay increase in the past several weeks. In contrast, 33 percent of voters who earn between $50,000 and $100,000 and 16 percent of voters who earn under $50,000 said the same.”
Daines said cutting taxes will spur the entire economy and he cited a CNBC report that showed small business confidence is very high in the nation right now.
“Businesses are taking cuts and investing in employees,” he said.
Maddie Mason, a sales representative for Philipsburg Brewing, said the brewery expects to produce 5,000 barrels this year and they are growing.
“We will probably save $15,000 due to the new tax bill,” she said. “That’s not a full-time staff person, but it definitely helps ease some of the payments we have on equipment and so forth. So we’ll use the money probably for a combination of raises for the staff as well as some of the equipment we’re investing in.”
Nolan Smith, the president of the Montana Brewers Association, pointed out that what’s good for breweries is good for Montana farmers.
“This reduction in taxes will allow Montana brewers to invest in their businesses thus creating more craft brewing jobs and supporting Montana hops and barley growers,” he said in a statement.