Site Visit: Tax Reform passed by Congress gives Small Brewery High “Hops”
By Nick Ivory, Regional Director
While visiting the state of Iowa, Advocacy stopped by Lion Bridge Brewing Company, a small husband and wife owned brewery located in the Czech village of New Bohemia’s Historic Main Street District in Cedar Rapids. Owned and operated by Quinton and Ana McClain, the establishment is a 10-barrel operation that currently offers roughly a dozen different beers brewed on-site. Lion Bridge stands out in the local market as the only brewery out of the handful of others in Cedar Rapids that offers a restaurant component. Patrons are able to view the daily brewing activity taking place through the large windows between the production area and the dining space.
Quinton credited the Tax Cuts and Jobs Act of 2017 for allowing them to keep more of their overhead and invest in their business. The specific provision in the legislation that he referenced lowers the federal excise tax on domestically brewed beer by half, from $7.00 to $3.50 per barrel for the first 60,000 barrels produced. The provision is tailored exclusively to accommodate small businesses in the industry, since it only applies to brewers who produce less than 2 million barrels annually. This essentially gives most qualifying brewers a tax break on 100% of their production per year, since a typical small brewing company doesn’t even come close to producing 2 million barrels in a year.
When the conversation turned to regulatory compliance, Quinton echoed a common theme that Advocacy has heard from small businesses across the country; that he and Ana should be able to focus on running their business instead of having to navigate through the vast array of rules that federal agencies have on the books. He emphasized that the most helpful resource for small businesses like theirs would be if agencies would provide proactive guidance on regulatory compliance instead of focusing solely on punitive audits. The high cost of health insurance was another problem that Quinton highlighted, as there is only one health insurance provider in Iowa’s health insurance market to choose from. The lack of competition has caused premiums to skyrocket, a 20% increase in their case. The burdens heaped onto small businesses as a result of the Affordable Care Act is something that Advocacy hears constantly from stakeholders.
Advocacy was in Iowa for Regional Regulatory Reform Roundtables July 17-19.
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Nick Ivory is the Regional Director. Ivory can be reached at email@example.com.