MEMPHIS, TN (abc24.com) - Tennessee’s beer tax is the highest in the nation.
That has prompted several local brewers and legislators to do something about it. They brought their “Beer Tax Reform Road Show” to the Cooper-Young area on Friday, February 8.
Over the last ten years Tennessee’s beer sales have been down two percent, while beer taxes have been up thirty percent.
Nobody thinks that is productive, and it all seems to be about how Tennessee’s beer tax is calculated.
“Tennesseans never want to be number one in taxes,” said State Senator Brian Kelsey, “and we do not want to be number one in the beer tax.”
Kelsey is a Republican from Germantown.
But number one in beer tax is exactly where Tennessee finds itself. In fact, Tennessee’s tax is 12 percent higher than the next closest state of Alaska.
“If you cut us in half, we would still be number eleven.” said J.R. Hand, the President of Hand Family Beverages in Memphis.
There is only one other state in America that taxes beer like Tennessee.
“Our beer tax is based on a percentage of sales,” Kelsey told abc24.com, “rather than a flat rate per volume like 48 other states.”
Simply put, that makes it hard for new breweries and more brands.
“We’re at 34 dollars a barrel,” said Hand, “Mississippi is around $7.50, and Arkansas about $13.”
“I don’t think many people are aware it’s so high.” said Ashley Crawford of Miller/Coors in Memphis.
But all involved are aware the high tax is hurting Tennessee’s beer consumers and producers.
“It is limiting choices,” Hand told abc24.com, “because a lot of brewers just don’t want to come here.”
“Our hope,” Kelsey said, “is that by fixing the beer tax we can bring more brewers to Tennessee; more jobs to Tennessee; and also open up more choices for consumers at lower prices.”
If the beer tax reform is passed, current taxes would not go down, but they would not rise exponentially in the future, as they have in the past.
Kelsey also promised that neither the state nor any municipalities would lose a single dollar of current revenue.