(The Center Square) – A bill introduced in the Washington State House of Representatives earlier this month would increase taxes on breweries across the state, potentially pushing many beer production facilities to the brink as lawmakers seek to raise revenue for the state’s projected $16 billion, four-year operating budget shortfall.
Rep. Lauren Davis, D-Seattle, and Rep. Joe Fitzgibbon, D-West Seattle, are the sponsors of House Bill 2079, which would, among other things, raise the tax on beer.
The bill also includes a section to allow the tax to take effect sooner rather than later: “This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2025.”
HB 2079 would impose tax increases on wine and cider as well. When it comes to beer, breweries face three distinct tax increases.
One provision would double the base beer barrel tax from $2 to $4 per barrel.
Then another tax rate of $9.56 per barrel would be imposed on breweries with over 60,000 barrels. Smaller breweries would pay a slightly reduced rate of $1.43 per barrel, down from $1.48.
The beer tax revenue from these breweries would go toward the state’s general fund.
Breweries would see one more additional tax, with a rate of $1.3 per barrel. This tax is not tiered or exempted for small breweries. Rather than go to the general fund, 20% of revenue would go to counties and 80% to cities.
The total tax burden for large breweries with over 60,000 barrels totals $16.16 per barrel, while smaller breweries would see a total tax of approximately $8 per barrel.
Washington Brewers Guild Executive Director Daniel Olson warns that HB 2079 becoming law would significantly strain brewery operations across the state by raising the cost of doing business at a time when small breweries are already facing rising expenses from inflation and tariffs.
“Many breweries operate on razor thin margins, and an excise tax increase would force difficult decisions: raising prices, reducing staff, cutting back on innovation, or in some cases, closing altogether,” Olson told The Center Square in an email.
Beer drinkers would also see immediate price increases at taprooms, restaurants, and retail stores, according to Olson.
Olson added that the excise increase would also stifle new brewery setups and make Washington less competitive compared to other Pacific Northwest states.
Oregon’s existing tax on beer is $2.60 per barrel, which is one of the lowest rates in the U.S. By comparison, large breweries in Washington would pay more than six times that amount if the bill passes.
Notably, a proposed Oregon House bill would require the state to study further taxation of beer and wine in the state.
Davis and Fitzgibbon did not respond to The Center Square’s request for comments on the bill.
