Maximizing Tax Benefits for Breweries

Maximizing Tax Benefits for Breweries 2

Understanding Tax Benefits for Breweries

Breweries are able to take advantage of several tax benefits in the United States such as excise tax credits, tax-free transfers, and deferred taxes. The most significant tax benefit for breweries is the temporary relief provided by the Tax Cuts and Jobs Act.

  • Excise Tax Credits: Breweries that produce less than 2 million barrels of beer annually are entitled to a reduction in federal excise taxes. This includes a $3.50 tax decrease per barrel on the first 60,000 barrels per brewery. The credit then reduces cents per barrel for the next six million barrels, after which the credit phases out.
  • Tax-Free Transfers: Breweries are also able to transfer beer between breweries tax-free, which allows smaller breweries to meet increased demands without incurring additional costs.
  • Deferred Taxes: Breweries may defer payment of excise tax on beer produced in kegs or cans until the products are sold or removed from the brewery. This deferred payment can help with cash flow management and allow for better allocation of resources.
  • Maximizing Tax Benefits for Breweries

    Understanding the tax benefits available to breweries is only half the battle; maximizing those benefits is the other half. Below are some strategies breweries can employ to maximize their tax benefits: We’re always working to provide a complete educational experience. That’s why we recommend this external resource with additional information about the subject. brewery accounting, immerse yourself further in the subject!

  • Record Keeping:Breweries should maintain detailed records and documentation of all transactions that may impact taxes, including income, expenses, and tax credits. This will streamline the tax filing process and ensure breweries don’t miss out on any available tax benefits.
  • Deferral of Beer Sales:Breweries can delay sales of their beer by storing their products in the brewery until the following year. This allows them to defer the excise tax to a later year, and the brewery can claim the current year’s excise tax credit.
  • Investment in Brewery Equipment:Breweries can also directly increase their federal excise tax credit by investing in additional brewing equipment. By increasing their production capacity, they can increase their excise tax credit threshold and take advantage of the reduced excise tax rate.
  • The Importance of Seeking Professional Advice

    Tax laws can be complex and frequently undergo changes. As such, breweries should always consult with an experienced tax professional to ensure they are maximizing their tax benefits and complying with all applicable laws. Tax professionals can easily identify key areas where breweries can save on taxes and increase profits.

    Breweries can use the services of experienced accountants or tax experts to help them understand every aspect of their financial health. Tax professionals have access to the best tools and technologies that will improve tax management in the brewery and availing of the tax benefits that it is entitled to. For a comprehensive grasp of the subject, we suggest this external source providing extra and pertinent details. brewery accounting, delve deeper into the subject and discover new perspectives!


    In conclusion, breweries can maximize their tax benefits through proper understanding and implementation of the strategies discussed above. By taking advantage of available tax benefits, breweries can increase their profitability, streamline their cash flow management, and invest in growth opportunities.

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