New Beer Tax Proposal
This session of the legislature in Iowa is going to be a very scary one for us beer lovers. Its has already started off on the wrong foot. I was hoping that passing .08 last year would let our industry have a reprieve this year, but that is not what is happening at all.
Yesterday there was a demonstration on the capital in favor of Keg Registration. We here at Millstream do not like this idea. We distribute most of our beer ourselves and Keg Registration is going to be another burden (and cost) for us, and very likely will not curb underage drinking at all. Teenagers will just go buy case beer or hard alcohol instead. We favor education about alcohol, not restriction from it. Actually, if you read the non-baised scientific studies, you will find that underage drinking is actually decreasing in this country. But that is an issue for another day.
If that is not bad enough, check out this little bit of news courtesy of the IWBDA:
“Senator Veenstra (R-Orange City) introduced a bill (SF 2050) that proposes doubling the beer excise tax to $11.78 per barrel. The bill is in a Senate Ways & Means Subcommittee of Senators Putney (R-Gladbrook), McKinley (R-Chariton) and Seng (D-Davenport). It is likely that this bill will also be around for most of the session. The bill, or a different version, will be a “live round” this session.”
If you are in the district of any of these guys, or if the idea of doubling the beer tax upsets you, I’d suggest contacting them and telling them that raising the Iowa tax on beer (doubling it at that!) is not going to help anything. Here is the info:
Senator John Putney (R-Gladbrook) (Home) 641.473.2129
(Capitol) 515.281.3371
john.putney@legis.state.ia.us
Senator Paul McKinley (R-Chariton) (Home) 641.774.5784
(Capitol) 515.281.3371
paul.mckinley@legis.state.ia.us
Senator Joe Seng (D-Davenport) (Home) 563.391.1627
(Capitol) 515.281.3371
joe.seng@legis.state.ia.us
The tax on beer in Iowa is 19 cents a gallon, or .43 cents a case. That works out to be 11 cents a 6pack. That doesn’t sound like much, but in the competitive world of beer, margins are slim. Combined with federal tax, the tax on beer is .93 cents a case. We sold 1140 barrels of beer last year, and paid a total of 14,700 dollar in beer taxes. If this tax becomes law we will pay 21,400 in taxes for that same amount of beer. That means we will have to make 6000 more dollars just to break even here at the brewery, and we did not even manage to break even this year. 
Raising prices higher for beer like ours will bring it over the 7 dollar a six pack mark. This can turn off potential buyers, and turn them over to relatively cheaper products. This ‘avalanche’ effect is very scary for us here in the small brewery business.
I will be writing them all of these senators a long letter this weekend, I suggest you do the same. Sin taxes are not the way to solve our budget problems in Iowa. They do little to curb the problems that they are ‘taxing’, and do much to make the lives of average people more expensive.
This is all a part of what we are calling the ‘back door to prohibition’. If you would like to read more here is a link to a large (30 page) .pdf document explaining it in detail. Its a MUST READ.
Aaron