MILWAUKEE— It is not surprising that 2020 has been an extremely tough year for craft breweries. However, it is not only the continued economic fallout from the COVID-19 pandemic that has many concerned. 

Federal excise taxes on the production of beer, wine, and spirits could go up starting Jan. 1 if congressional action is not taken. Back in 2017, Congress passed a provision that lowered excise tax rates on each barrel of beer produced. However, the provision was only for two years. In 2019 it was extended; so far, no action has been taken in 2020. It is set to expire on Dec. 31. 

Russ Klisch, president of Lakefront Brewery in Milwaukee, is among those who are concerned. 

“It is a very tight margin industry right now, anytime you get any increase in taxes, it can be devastating for you. We are not looking forward to having to go from $3.50 a barrel to $7 would be hard on us," says Klisch.

Without action, Klisch estimates his brewery could end up paying an additional $130,000 per year in excise taxes. 

Organizations like the Brewers Association, which advocates for breweries across the country, are pushing for the passage of the Craft Beverage Modernization and Tax Reform Act. The bill, which has seen bipartisan support in Congress and the Senate, would help keep excise taxes at their current rates. Despite support from both sides of the aisle, it has yet to be taken up by Congress. 

“Professional leadership needs to hear from brewery owners, brewery personnel, that this is important for them, contact your member of congress, urge them to go to their party leadership," says Brewers Association CEO Bob Pease.

The Craft Beverage Modernization and Tax Reform Act has four sponsors in the house and Senate, two Republicans and two Democrats. Sponsors include Democratic Rep. Ron Kind of Wisconsin. ​