Local craft brewers foaming over beer tax

SEATTLE — Seattle’s small beer brewers are worried about how a proposed tax hike on beer will affect their ability to stay in business.

Schooner Exact Brewing Company is one such brewery. It started off as a home-brew operation in the garage of two teachers, Heather and Matt McClung in 2006, and it has grown into a 2,700-barrel-a-year operation with 20 employees and a small pub in SoDo.

"From the beginning with it, I wanted to go big and do this professionally,” Matt McClung said.

But plans to raise taxes on small brewers could change that.

Various bills in the legislature would either double or quadruple the tax on small brewers from roughly $5 per barrel to up to $20.

Gov. Jay Insleee has said he thinks that will mean 9 cents a pint to beer drinkers, and will help pay for education costs in the state. That may not sound like much, but Heather McClung said it'll be 50 cents a pint by the time distributors and bars pass that on to consumers and pull that pint at the tap.

"That seems like a bit of inequality there,” Heather McClung told KIRO 7 Eyewitness. “And if the state wanted consumers to pay only 9 cents for education they should've put it on as a sales tax at the end."

If the tax is increased, small brewers would pay the same amount of tax as big companies from out of state. Beer lovers worry their favorite local brewers will be forced to shut down if the tax makes them uncompetitive.

"It's a great sense of community with the breweries right now.  Everybody's ready to help everybody else out. I'd hate to see any of these guys go," said Jason Shrum, who gives tours of local breweries.

Schooner just bought a new 30-barrel vat to increase production. But all those suds could head south to Oregon where taxes are lower, allowing the McClungs to avoid thousands in taxes.

“We live in a great place and we need to pay for it,” said Matt, “But doubling the tax doesn't make sense.”

Brewing companies plan to speak against the tax at a legislative committee Friday morning, and craft beer fans are planning a rally in Olympia at noon the same day.

KIRO