Comprehensive Tax Reform

As Congress addressed the most comprehensive business and individual tax overhaul since 1986, America’s 3,300 independent beer distributors worked to ensure:

  • Distributors could continue supporting 135,000 quality jobs.
  • Tax policy changes would support small businesses that make significant contributions to local and national economic bases.
  • Changes to the estate tax would help family businesses invest in the future.

Main Street Fairness Act (Rate Parity)

NBWA supported comprehensive tax reform and encouraged Congress to lower the individual and corporate tax rates in similar ways. H.R. 116, introduced by Rep. Vern Buchanan (FL), and S. 707, introduced by Sens. Susan Collins (ME) and Bill Nelson (FL), provided tax parity so that Main Street businesses would not be taxed at a higher rate than large corporations.

S Corporation Modernization Act (Pass Throughs/Family Businesses)

There are more than 4.5 million S corporations in the United States, employing one in four private-sector workers. NBWA member companies are largely structured as S corporations, and their business income flows through to the owner’s individual income tax return. NBWA asked Congress to support tax reform that treats S corporations and large corporations equitably, allowing beer distributors and other American businesses to support growth for jobs and the economy.

NBWA asked Congress to support the S Corporation Modernization Act, H.R. 1696, introduced by Reps. Dave Reichert (WA) and Ron Kind (WI), and S. 711, introduced by Sens. John Thune (SD) and Ben Cardin (MD).

Last-In, First-Out (LIFO) Accounting

NBWA opposed the repeal of the LIFO method of accounting for inventory. More than half of NBWA distributor members use LIFO. If LIFO were repealed, beer distribution companies that utilize LIFO would be impacted disproportionately and face a significant increase in tax liability.

NBWA asked Congress to oppose efforts to repeal LIFO inventory accounting.

Estate Tax

Estate tax relief and preserving estate planning tools, including valuation discounts and grantor-retained annuity trusts, helps beer distributors and other family-owned businesses plan and invest in the future.

NBWA asked Congress to repeal the estate tax and support H.R. 631, introduced by Reps. Kristi Noem (SD) and Sanford Bishop (GA), and S. 205, introduced by Sen. John Thune (SD).

Valuation Discounts (For Family Businesses)

Last year, the Treasury Department issued proposed regulations on Section 2704, affecting estate, gift and generation-skipping taxes for transfers of interests in family-owned entities. The proposed changes sought to eliminate discounts for minority and non-controlling shares of family businesses that are subject to the estate tax.

NBWA encouraged Congress to support the Protect Family Farms and Businesses Act, H.R. 308, introduced by Rep. Warren Davidson (OH), and S. 47, introduced by Sen. Marco Rubio (FL), to block the proposed regulation from becoming final.

Federal Alcohol Excise Taxes

NBWA believes the Craft Beverage Modernization and Tax Reform Act is a step in the right direction because it reflects current industry structure; applies to all alcohol manufacturers and importers; and recognizes distinctions among beer, wine and liquor.

The Craft Beverage Modernization and Tax Reform Act was introduced in the Senate (S. 236) by Sens. Ron Wyden (OR) and Roy Blunt (MO), and companion legislation was introduced in the House (H.R. 747) by Reps. Erik Paulsen (MN) and Ron Kind (WI). Although the legislation doesn't provide tax relief for NBWA’s distributor members, the bill is a positive development because it reflects current industry structure and applies to all brewers and importers. The legislation also provides tax relief for wine and liquor producers. In past years, NBWA did not support legislation that sought to change industry structure by creating preferential tax treatment for a few brewers. The Craft Beverage Modernization and Tax Reform Act, originally introduced in 2015, unified all interested groups around legislation to reduce federal excise taxes.

Marketplace Fairness

NBWA asked Congress to support policies that would give states the tools they need to level the playing field between brick-and-mortar businesses and online retailers. The Marketplace Fairness Act was introduced in the Senate (S.976) by Sen. Michael Enzi (WY), and the Remote Transactions Parity Act of 2017 (H.R. 2193) was introduced in the House by Rep. Kristi Noem (SD). 
 
Brick-and-mortar businesses are the foundation of local communities and should not face a marketplace disadvantage. Currently, Main Street businesses are required to collect state sales taxes on the goods they sell, while their online retail competitors often are exempt from doing so. This disparity in tax treatment puts local businesses at a competitive disadvantage and harms the ability of states to collect revenue. States should be able to collect taxes from online retailers, as well as those with a physical presence.