Connecticut has brewed a new tax cut, slashing the state’s excise tax on beer by 16.7%, which took effect July 1.
In a June 30 press release, Gov. Ned Lamont noted how “Connecticut’s craft brewing industry has been booming in recent years,” and that “This tax cut is another way that we can support our locally-owned small businesses.”
Today, Connecticut is home to more than 120 breweries, supporting 21,228 jobs in agriculture, manufacturing and retail, while yielding $3.8 billion in economic output. Comparatively, the beer industry contributes more than $409 billion to the U.S. economy, according to the National Beer Wholesalers Association.
The latest tax cut is one of several actions undertaken by the Lamont Administration in recent years to ease regulations toward brewers, including increasing the amount of beer breweries could sell for off-premise consumption; consolidating manufacturer permits; creating a permit to allow manufacturers to sell all other types of alcohol in the state; and allowing craft breweries to hold multiple manufacturing permits so they can also make wine, cider, spirits and mead under one roof.
In terms of dollars and cents, what does a 16.7% reduction in the excise tax look like? (Source: Gov. Lamont’s Press Release)
| Prior to July 1, 2023 | Beginning July 1, 2023 | |
| Barrel (31 gallons) | $7.20 | $6.00 |
| ½ Barrel | $3.60 | $3.00 |
| ¼ Barrel | $1.80 | $1.50 |
| Wine Gallon | $0.24 | $0.20 |
The most impacted are beer manufacturers, wholesalers or retailers as typically “consumers won’t see the tax as an additional excise tax at checkout,” according to a Tax Foundation report, adding “the tax will already be priced into the retailer’s sales price.” In the same report, ‘How High Are Beer Taxes in Your State?’, Connecticut ranked 27th in the highest beer taxes in the nation at $0.23 dollars per gallon. Meanwhile, Tennessee ranked the highest at $1.23 and Wyoming the lowest at $0.02.
By this time next year, perhaps the new tax cut will help Connecticut trend toward the right direction.
