Connecticut to reduce sales tax on beer in 2023

Connecticut

BLOOMFIELD, Conn. (WTNH/WPRI) – One of Rhode Island’s neighboring states is slashing taxes on beer.

Connecticut’s newly enacted state budget signed into law last month will reduce taxes on beer by 16.7%.

Prior to 2012, there were only a handful of breweries in the state. According to Gov. Ned Lamont’s office, there are currently more than 120 operational breweries in Connecticut, with more in the works.

A report released by the National Beer Wholesalers Association and the Beer Institute found that beer brewed in Connecticut yields $2.9 billion in economic output for the state and supports 17,892 jobs.

In a news conference Wednesday, Lamont said the tax reduction is his way of showing support for locally owned small businesses.

“Connecticut’s craft brewery industry has been booming in recent years, and it is evidenced by the growth of hundreds of new jobs for our state’s residents,” Lamont said. “We should be doing everything we can to support locally-owned small businesses, including craft breweries. This reduction in taxes is another way we can support them.”

The state anticipates a $2 million revenue loss from the tax decrease, which is scheduled to take effect on July 1, 2023.

CT Brewers Guild Executive Director Phil Pappas told WTNH-TV this will not only help employees but the consumer as well.

“With breweries being able to save some dollars, reinvest that money into some production, add some things to their taproom. Really get back to the way and the growth rate of where we were back in 2019 before all this happened,” Pappas said.

The changes are as follows:

  • Barrel (31 gallons): Current $7.20/New $6
  • ½ Barrel: Current $3.60/New $3
  • ¼ Barrel: Current $1.80/New $1.50
  • Wine Gallon: Current $0.24/New $0.20

According to the R.I. Department of Revenue, beer and malt sales accounted for approximately $125.73 million, or 34.85%, of gross sales of alcoholic beverages by liquor stores in 2019.

Rhode Island’s sales tax exemption applies to wine and spirit sales, not to beer and malt sales.

The NBWA and Beer Institute report shows the beer industry accounts for 6,103 jobs in Rhode Island and yields $876.6 million in economic output for the state. Neighboring Massachusetts yields $7.5 billion, with more than 48,000 jobs.

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