The Beer Tax Reform Act of 2013 takes effect tomorrow and will change the tax on beer from price-based to volume-based.
The current law was created in the 1950s. State Senator Brian Kelsey (R-Germantown) says the new law will promote competitiveness and economic opportunity.
“Tennessee beer sales have declined 5 percent over the past decade, while the revenues from the wholesale tax climbed to over 30 percent,” Kelsey said. “This demonstrates the punitive nature of this antiquated tax, which just doesn’t make sense.”
According to the State Senate, Tennessee leads all other states’ beer tax rate by a 12 percent margin at $37 per barrel, which is “more than four times the $8.69 rate in Virginia. Other states in the region include $19.13 in North Carolina, $23.96 in Kentucky, $7.51 in Arkansas and $13.23 in Mississippi, $32.65 in Alabama, $1.86 in Missouri and $30.73 in Georgia.”
Kelsey says the new volume-based tax structure will continue current levels of funding that the state’s local governments receive from the tax.
Tennessee’s craft brewers were hit especially hard by the current tax, since their higher price-point beers were taxed more than larger distributors’ products.