At a public hearing examining a new beer tax in Pennsylvania, Adam Harris of the Brewers of Pennsylvania made it clear what brewery owners want.

“We want clarity. Because of different rules, there is confusion,” Harris said. “I’ve been going around the state talking to our brewers, and they’re very scared because of the uncertainty.”

The uncertainty Harris refers to concerns the state Department of Revenue’s recent tax bulletin, which requires breweries to collect the state’s 6 percent sales tax on every portion of beer sold to customers at their tap rooms and retail outlets. The tax is set to go into effect July 1.

As written, breweries who bypass distributors and sell beer directly to consumers in their tasting rooms and retail storefronts would be required to charge the tax at the point of sale. Instead, brewery owners believe the tax should be applied at the wholesale level, which already is the case for transactions between distributors and retailers.

The per serving tax as written would be a rate four or five time greater than retailers such as bars and restaurants pay when they buy beer from a distributor, according to Brian Eaton, co-owner of Grist House Craft Brewery in Millvale.

The public hearing held Tuesday at the Spoonwood Brewing Co. in Pittsburgh gave brewery owners a chance to share their concerns with members of the House Liquor Control Committee and representatives from the Pennsylvania Department of Revenue, among others.

“If the tax on beer sold by breweries goes into effect as proposed by the Department of Revenue, my small business will see an additional tax burden equal to three full-time jobs we planned on hiring for, and that’s just in one year,” said Matthew Katase, co-founder of Brew Gentlemen in Braddock.

“We all hope that we will be able to invest back in each of our communities, create new jobs in agricultural manufacturing and attract other investments to our areas. This tax will hurt our ability to do so. We hope to find a solution that brings clarity and parity,” Katase said.

If the taxation of beer sold by breweries goes into effect as proposed by the Department of Revenue, Eaton said, his business will see an additional tax burden of $80,000 to $100,000 per year.

“This is a burden that I will either have to pass on to my customers, which would most certainly lead to a reduction in sales, or eat the cost of the tax, which means less money to reinvest in my growing business,” Eaton said.

“There exists the possibility that the total tax burden on each pint of beer we sell could consist of 6% state sales tax, 1% Allegheny County sales tax, plus an additional 7% Allegheny County drink tax, totaling a whopping 14% tax on every beer we sell at our breweries.”

The hearing was hosted by state Rep. Natalie Mihalek, R-Allegheny/Washington, and included representatives from the Pennsylvania Department of Revenue, Pennsylvania Restaurant and Lodging Association and Pennsylvania Licensed Beverage and Tavern Association.

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