E-Malt.com News article: USA: Beer tax break for American brewers acts like a tariff on foreign-made beer

Support for a proposal to reduce the excise tax on American-made beer but not on foreign-made beer provides an interesting juxtaposition on the tariff debate, The Sentinel reported on March 24.

One of the main arguments against the United States imposing tariffs is that other countries retaliate with their own tariffs, which impacts exports of American-made goods. One could argue that reducing the excise tax on American-made beer is the same as imposing a tariff on foreign-made beer, but in this case, some American companies support the tariff-like legislation.

The Kansas excise tax on American-made beer and cereal malt beverages would be reduced from $0.18/gallon to $0.06/gallon under House Bill 2714, which was debated in the House Committee on Taxation. The gallonage tax of $0.18 would remain on foreign imports of the beverages.

Among supporters of the legislation was Adam Kazda with Anheuser-Busch, who saw the bill as “leveling the playing field” for American breweries:

“America’s beer production is shifting rapidly to Mexico. And with alarming consequences for our economy and communities. Over the last 20 years, the percentage of beer imported into America has more than doubled. Growing from 11% to 24%. Of those beers imported, 80% originated from Mexico, where beer is far cheaper to produce.

“This shift comes at a price, mainly at the expense of American workers, farmers, and communities. We hope this bill will encourage foreign brewers to make investments in America. The pride we take in this great country should be properly and accurately applied to the American beer industry.”

Also lending support was Chuck Magerl, founder of Free State Brewing in Lawrence, which, as Magerl noted, was the first legal brewery in Kansas since 1880 when Free State opened in 1989. Magerl said he had worked on enabling legislation in Kansas in the late 1980s to allow breweries to operate in the Sunflower State:

“Today, you can find breweries across the state of Kansas, from Colby to Pittsburgh, from Atchison to Liberal. These businesses have created a sense of pride in many communities who value the entrepreneurship and creativity they represent.

“The Kansas legislature’s action, in 1987, was instrumental in this development, and I believe the proposal you have before you is very significant as well.

“House Bill 2714 would provide a reduction in the gallonage tax we pay monthly on our beverage production. That reduction would be proportional to what was adopted last year in Missouri, and it’s currently working its way through the Iowa legislature.”

Opposing the bill was Vance Ginn, Ph.D., senior fellow at Kansas Policy Institute, owner of The Sentinel, who sees the measure as nothing more than the government “picking winners and losers.”

“This is cronyism in a can. Kansas lawmakers should reject HB 2714 and other bills like it. It is bad tax policy and worse trade policy. Selective tax breaks for ‘American-made’ beer are still market distortions, and they do nothing to guarantee lower prices for families. Real pro-growth reform lowers taxes neutrally, treats competitors equally, and lets consumers decide what wins in the marketplace.”

In written opponent testimony, Tyler Rudd with the Wine Institute agrees, and adds a potential constitutional roadblock to the Kansas legislation:

“First and foremost, the effect of the tax preference in HB 2714 would be to choose winners and losers of companies in the U.S. If this bill were to pass, foreign companies that make beer in America would benefit while American companies that make or import beer from another country would suffer a higher tax burden. So, is this bill truly helping American businesses?

“Secondly, this legislation would violate our U.S. Constitution that grants only Congress the power to regulate commerce with ‘foreign nations, among states, and with Indian tribes’. Creating this tax disparity on imported beer and CMB (cereal malt beverages) would function as a tariff on foreign commerce in violation of our Constitution. The U.S. Supreme Court has repeatedly held that, ‘[a]bsent congressional approval, … a state tax … will not survive Commerce Clause scrutiny if … [it] discriminates against interstate commerce’ — and this prohibition applies with particular force in the context of a ‘tax affecting foreign commerce.’

“Finally, HB 2714 would be held in violation of our country’s international agreement if it became law. It would violate the United States international trade agreement with members of the World Trade Organization under the General Agreement on Tariffs and Trade (GATT). This agreement requires every country to treat all products the same once they are imported into that country. This bill does not do that.”


24 March, 2026