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“Fix the Beer Tax” campaign comes to Memphis on Friday with rally at Young Avenue Deli

February 06, 2013 By: mike Category: Breweries, Craft beer, Distribution, Events, Memphis

Fix the Beer TaxThe “Fix the Beer Tax” campaign — which is aimed at reining in Tennessee’s highest-in-the-nation beer taxes — is coming to Memphis this week.

The Young Avenue Deli in Cooper-Young will play host to a rally on Friday from 5-7 p.m. in support of the Beer Tax Reform Act of 2013. There will be petitions to sign and Tennessee-brewed beers available for tasting. Brewers, distributors and legislative sponsor State Sen. Brian Kelsey (R-Germantown) will be in attendance.

The statewide campaign, which is being spearheaded by the Tennessee Craft Brewers Guild and Tennessee Malt Beverage Association, was launched last week in Nashville with a rally at Yazoo Brewing Company that drew more than 400 people.

Here’s the full press release about Friday’s event in Memphis:

Beer Tax Reform Act of 2013 campaign rallying at Young Avenue Deli

Distributors, Brewers, Consumers: Rein in nation’s highest, out-of-control beer tax

MEMPHIS – A statewide campaign to reform 1950s era beer tax policy that is the root cause of Tennessee’s dubious rank as the nation’s highest beer tax state will conduct a Memphis rally at Midtown’s Young Avenue Deli on Friday, Feb. 8, at 5 p.m.  Participants will include legislative sponsor Brian Kelsey, Memphis area beer distributors and brewers, and hundreds of consumers.

The Beer Tax Reform Act of 2013, filed Jan. 29 by Sen. Kelsey (R-Germantown) and Rep. Cameron Sexton (R-Crossville), proposes to modernize Tennessee beer tax with a simple modification. It would calculate wholesale tax on volume rather than price and solve Tennessee’s odd (and nationally unparalleled) tax policy that currently results in the beer tax rate rising exponentially higher every year.

Here’s how much higher it rises: In 2008, Tennessee caught and passed Alaska as the top state taxer of beer.  By 2012, Tennessee had increased that lead by 12 points, and if the state keeps rising at the current average annual price increase of $1.15, in five years the average tax rate will be $42.75 per barrel – 29 percent higher than Alaska; in 10 years it will be $48.50 – 46 percent higher; in 15 years, it will be $54.25 per barrel – 64 percent higher.

The statewide Fix the Beer Tax campaign began last week in Nashville with an event that attracted more than 400 Tennesseans and resulted in an explosion of statewide social media in support of legislative reform.  This week the campaign will be visible in dozens of Memphis area restaurants and craft brewery establishments, inviting consumers though social media to voice support and contact legislators. The campaign is on the Web at www.fixthebeertax.com; on Facebook at www.facebook/fixthebeertax; and on Twitter at @fixthebeertax.

“Tennessee is beyond the tipping point,” said Rich Foge, president of Tennessee Malt Beverage Association.  “The current tax policy allows the tax rate to rise unchecked at such a dramatic rise that it is now impacting competitiveness, economic opportunity and costs and choice for consumers.  The tax rate is out of control – it’s time to modernize this old tax and make it right.”

Also, here’s video from the “Fix the Beer Tax” kickoff in Nashville this week:

VIDEO: “Fix the Beer Tax” kick-off event in Nashville

February 03, 2013 By: mike Category: Breweries, Craft beer, Distribution, Events, Government

Fix the Beer TaxFor those who missed the “Fix the Beer Tax” kickoff Wednesday in Nashville, here’s some video below from the event.

There were speeches from Linus Hall from Yazoo Brewing Company and the Tennessee Craft Brewers Guild; Rich Foge of the Tennessee Malt Beverage Association; and legislative sponsors State Rep. Cameron Sexton (R-Crossville) and State Sen. Brian Kelsey (R-Germantown). There are also some testimonials at the end.

The “Beer Tax Reform Act of 2013″ seeks to reform the 17% beer wholesale tax in Tennessee, which contributes to the state having the highest beer taxes in the nation. (Read FuzzyBrew’s earlier post here.)

You can follow the progress of the bill on the Tennessee General Assembly’s website here, or follow the campaign at www.fixthebeertax.com, and at www.facebook.com/fixthebeertax.

“Fix the Beer Tax” campaign launches to reform Tennessee’s beer taxes

January 30, 2013 By: mike Category: Breweries, Distribution, Events, Government

A campaign aimed at reforming Tennessee’s beer taxes — which rank as the highest in the nation — kicks off today in Nashville.

The goal? Reform the 17% beer wholesale tax in Tennessee.

The “Fix the Beer Tax” campaign is being spearheaded by the Tennessee Craft Brewers Guild and Tennessee Malt Beverage Association.Fix the Beer Tax

Details of the plan will be released today, but “Fix the Beer Tax” organizers want to move away from the 17% wholesale tax on beer and instead tax beer on volume sold, with the changes being revenue neutral for municipal governments that receive proceeds. The effort, however, will likely face resistance from local governments.

Tennessee’s wholesale beer tax was established more than 50 years ago and has generated more than $2.2 billion in tax revenue, according to the Tennessee Malt Beverage Association. But the tax, critics say, is leading to higher beer prices, fewer choices for craft beer consumers and is preventing craft beer entrepreneurs from opening their businesses in Tennessee. Even if Tennessee’s beer tax rate were cut in half, it would still be the 11th highest in the nation.

Details of what is being called the “Beer Tax Reform Act of 2013,” which already has legislative sponsors, will be announced at a rally at 5 p.m. in the taproom of Yazoo Brewing Company, 910 Division Street in Nashville. (The Facebook event page is here.) Brewers from the Memphis area, as well as from across the state, are expected to turn out for the event.

Yazoo’s Linus Hall is president of the board of directors of the Tennessee Craft Brewers Guild, which formed recently to help change the beer laws in the Volunteer State.

UPDATE: Read the full press release below issued this morning by the “Fix the Beer Tax” campaign with more details about the campaign and comments from its legislative sponsors.

A Reform Proposal to Cure the Beer Tax that Ales Tennessee

NASHVILLE, Tenn. – A new legislative proposal promises to bring logic to Tennessee law and stabilize an out-of-control situation that has pushed the state into the beer-tax stratosphere.

Tennessee has the nation’s highest effective beer tax rate, 12 percent higher than No. 2 Alaska, and it is rising higher every year, regardless of whether beer sales rise. This effect is the result, likely unintended, from beer-tax policy established by the State of Tennessee in 1954.  Since that time, Tennessee has blown past every state to be the nation’s highest taxer of beer.

“Tennessee beer drinkers are already paying more than their fair share, but this is getting out of control,” said Scott Turner, president of Ajax Turner Co. Inc.  “We are completely out of step with the nation’s 49 other states. In addition to higher taxes, this is having a detrimental effect on economic development and consumer choice.”

Linus Hall opened Yazoo Brewing in 2003 to booming sales and national acclaim. Though his business continues to grow, Tennessee’s excessive tax policy is choking down the company’s business opportunities, including employment growth.

“I want to hire more people and invest more money in my business, but because of the tax, it makes it more difficult to do so,” said Hall. “We’re growing, but just not as fast as we could have to keep up with consumer demand. The margins are just too small because of the 17-percent tax.”

The Beer Tax Reform Act of 2013, supported by a coalition of Tennessee businesses and consumers, would change the way the state’s local wholesale beer tax is structured, though it would still preserve the current levels of funding that the state’s local governments receive from the tax.

The Beer Tax Reform Act of 2013 will be sponsored by State Representative Cameron Sexton (R-Crossville) and State Senator Brian Kelsey (R-Germantown).

Rep. Sexton, Sen. Kelsey, Tennessee craft beer makers, national brewers and importers, wholesalers and consumers will launch a statewide grassroots campaign in support of beer tax reform on Wednesday, Jan. 30, 5 p.m. at Yazoo Brewing Co., 910 Division Street in Nashville. Hundreds of supporters are expected to attend and begin a statewide tour of campaign events in Memphis, Clarksville, Nashville, Cookeville, Chattanooga, Knoxville and Tri-Cities.

The grassroots effort will be visible in hundreds of Tennessee restaurants and craft brewery establishments, inviting consumers through social media to voice their support and contact legislators.  Information about the Beer Tax Reform Act of 2013 can be found on the Web at www.fixthebeertax.com, and at www.facebook.com/fixthebeertax.

Said Rep. Sexton, “Our state’s wholesale beer tax needs reform. Right now, the tax is working against Tennessee. The world has changed – Tennessee has changed – a great deal since the wholesale tax was established in 1954. The policy should be modernized to reflect changes in the market, such as the growth of craft brewers, to encourage rather than discourage economic investment.

“Our goal is to reform the beer tax so that the revenues reflect the beer sales, while at the same we want to ensure that local governments continue to receive the current revenue levels from the tax.”

Added Kelsey: “Tennessee beer sales have gone down 5 percent in the past decade, but the revenues from the wholesale tax have gone up over 30 percent.  It doesn’t make sense to tax any product like that. Punitive taxes are always unacceptable.”

Even if the Beer Tax Reform Act of 2013 is approved, and calculated on volume rather than price, Tennessee would retain title as the nation’s highest beer tax state.  It simply would not continue to grow with such out-of-step force compared to other states’ rates.

How Tennessee Taxes Beer

Tennessee’s beer tax is a combination of three taxes.  Federal and state excise taxes are calculated by volume, and then a 17-percent local wholesale tax is calculated on price. (Later, at the cash register, consumers pay the additional sales tax.) So, for brewers and wholesalers, when costs such as fuel, labor and materials go up, the beer tax climbs ever higher.

The Tennessee Beer Tax Reform Act of 2013 addresses this situation by proposing that like 48 other states, Tennessee bases its beer tax on volume.  (Kentucky also has an added wholesale tax, though the Bluegrass State’s rate is considerably lower than Tennessee’s and its effective rate is $23.96.) The Tennessee reform proposal is revenue neutral because it maintains the wholesale tax revenues at current levels, while slowing the explosive growth in revenues created by a price-based model that dates to 1954.

Out of Step with the Nation

How out of step is Tennessee with the other 49 states?  In 2005, Tennessee was the fourth highest beer tax state in the country. Since then, Tennessee has vaulted past Georgia, Alabama and Alaska to become No. 1.  And now Tennessee’s tax has grown to be 12 percent higher than second-place Alaska.

“A tax that goes up that fast and continues to climb in spite of lower sales is punitive and is simply not good tax policy,” said Ottis Phillips, president of SEC Enterprises, Inc., a wholesaler in Cookeville. “The local wholesale tax might have made sense 60 years ago when it was established, but this is excessive, and surely Tennessee didn’t intend to become the highest beer taxer in the United States.”

The current arrangement hurts consumers and competitiveness in several ways. For example:

· Even though a craft brewery, such as Nashville’s Yazoo Brewery, is based in Tennessee, it is much more profitable for that brewery to truck and sell its products to customers in other states.

· Meantime, other breweries ship their products straight through Tennessee but don’t stop at warehouses here, venturing on instead to places such as Kentucky ($23.96 a barrel) or Virginia ($8.69). The $37 tax here makes their products too expensive for them to consider selling in the Volunteer State. Consumers pay with a comparative lack of choice on the shelves.

· The extreme tax policy is running off investment. Sierra Nevada considered locating its newest brewery here, but the nation’s highest beer tax helped shape its decision to locate in North Carolina instead, where the effective beer tax rate is $19.13.

· One Tennessee distributor, Kurt Strickmaker at BountyBev, actually makes half as much on many of his kegs than his local government does in taxes. His local government takes twice as big a bite as he does on many of his product offerings.

· Tennessee is in a tug-of-war with Virginia to keep Kingsport-based brewer Erich Allen (Studio Brew) in the state.  Kingsport economic development officials want Allen and his popular beers to be a downtown economic development anchor, but Virginia is exploiting Tennessee’s top tax status as a reason for him to migrate across the border and build in Bristol, Va.

Tennessee’s brewers and wholesalers understand that local governments expect and depend on the proceeds from the local wholesale tax on beer. They are already paying more than their fair share. But the current situation is bizarre, creating an ever-rocketing tax rate that defies logic.

For the good of Tennessee’s competitive edge and for the good of consumers, the Beer Tax Reform Act of 2013 promises to bring common-sense logic to this portion of the state’s tax code.

Check back here soon for more details. Also, be sure to visit the “Fix the Beer Tax” website or follow the campaign on Facebook or Twitter.

Southern Tier Brewing Company to expand distribution into Tennessee

September 26, 2012 By: mike Category: Breweries, Craft beer, Memphis

Southern Tier Brewing CompanyNew York’s Southern Tier Brewing Company is expanding its distribution network into Tennessee, starting with the Nashville metro area. Distribution to the rest of the state is slated for January 2013.

Here’s the full press release:

LAKEWOOD, NY – Southern Tier Brewing Company of Lakewood, New York, announces the expansion of their distribution network with the addition of Ajax Turner of Nashville, TN.

The brewery is preparing to ship their entire catalog of beers to the Music City metro area, including limited quantities of the seasonal cult sensation Pumking Imperial Pumpkin Ale. The first of the Blackwater Series of imperial stouts to ship will be Oat followed by Choklat, available in November.

The SuperPack will be available in early 2013. Featuring Unearthly Imperial IPA, 2xIPA, and Iniquity Imperial Black Ale, the SuperPack is a high gravity 12 pack of 12 ounce bottles with an average ABV of nearly 9.0%.

With a varied catalog, the Southern Tier Brewing Company has a lot to offer beer lovers.

“There was a large Tennessee shaped hole in our map. We’ve begun filling that in with the addition of Ajax Turner Company,” said Phin DeMink, brewery president. “They’ll usher us in to another growing craft market in the greater Nashville area. We look forward to providing Southern Tier Brewing Company beers to another southern state.”

DeMink added that the rest of the state will be online by January 2013.

“We are thrilled to add Southern Tier to our portfolio and are looking forward to spreading the liquid greatness they are known for.” Clark Calvert, craft/import manager at Ajax Turner added, “Nashville’s craft beer lovers are in for a real treat this October with the arrival of this great brand.”

In the summer of 2012 the brewery started construction on an expansion to include a 110 BBL brewhouse to help meet calls for increased production. Prior to this, a new high-speed bottle line was installed in December 2010 followed by a high speed keg line. Quality control and product consistency has remained paramount to the design decisions.

Southern Tier Brewing Company has watched their output and public demand steadily increase since the first few hundred barrels brewed in their former facility in 2003. With a remarkable 70,000 BBL brewed by the end of 2012, and with additional new markets like Tennessee, the brewery expects 2013 to be another record setting year for production.