Photo | Dale Liesch
At its inception, the owners of Fairhope Brewing used simple spreadsheets and sticky notes to keep track of sales and taxable revenue.
While the tracking system has gotten a lot more complex as the brewery has grown, the way they are taxed could change if a bill winding its way through the Legislature is passed. That’s a good thing for co-owner Brian Kane.
“We obviously don’t mind paying taxes,” he said. “Simplifying it is a big deal for us.”
Under current law, breweries like Fairhope, which has its own taproom, must calculate the taxes paid to the state per sale, whereas breweries that don’t have a retail side simply calculate it per the number of large kegs produced, Alabama Brewers Guild Executive Director Dan Roberts said.
“It’s a hassle to reprint and keep track each month of the number of individual pours made in taprooms,” he said. “It’s also error prone.”
And it doesn’t account for losses during pours, Roberts said.
The current law means breweries pay, on average, $12.40 per keg rather than the $8.30 per keg other wholesalers pay. If the proposed legislation is approved, breweries, including all local ones, would be allowed to pay the $8.30 per keg price, Roberts said. To simplify, the breweries would be charged the excise tax based on the number of kegs produced and not on the number sold.
“This would allow breweries to do what wholesalers do and pay by the keg,” he said. “It’s super reasonable.”
John Serda, owner of Serda Brewing in Mobile, said the changes to the taxation would be “great.”
“It’s about time,” he said. “I know the current system is kind of ridiculous.”
Ryan Shamburger, general manager of Big Beach Brewing in Gulf Shores, said the bill could save the operation time and “possibly money” on the tax side, if passed.
“It’s an incredible burden to fill out paperwork including every pour, every growler fill and every sample,” he said.
In addition to helping the more well-established brewers, the bill would provide relief for those new to the scene, Kane said.
Another aspect of the bill Kane and Roberts said would help local brewers allows bigger breweries to open brewpubs in separate locations. Serda said he wanted to add a brewpub at his current brewery location when it first opened, but decided it wasn’t cost effective. He said an ability to serve other beer at his location would be good. In addition, Serda said he believes the more exposure locals have to craft beer, the better it is for local producers.
Kane said while he doesn’t know if Fairhope Brewing would take advantage of the reduced brewpub regulations “right away,” he was in favor of the change because it would allow operations to expand in a different way.
Shamburger said he supports the brewpub idea, adding it could benefit Big Beach in the future. He said that while the brewery is in the Waterway Village neighborhood of Gulf Shores and away from the beach, it would be a good idea to open up a brewpub in the more tourist-filled areas to allow the beer to gain more exposure. The plan would also not put brewing equipment at risk in more hurricane-prone areas.
In addition to opening up brewpubs to breweries that produce more than 10,000 barrels of beer annually, the bill seeks to remove other regulations, including requiring brewpubs to serve food and requiring them to be built in historic buildings or in distressed areas.
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