Brewers say higher beer tax would be hard to swallow

SPRINGFIELD - Craft beer brewers and advocates gathered Friday at the Capitol to oppose a tax increase on beer and cider that Gov. J.B. Pritzker introduced last week to help fund a comprehensive capital infrastructure plan.

Under that proposal, the per-gallon tax on beer and cider would rise to 27.7 cents from the current rate of 23.1 cents, a rate established when lawmakers approved the state's last capital plan in 2009.

Combined with similar tax increases on wine and liquor, the current proposal would bring $120 million in new revenue to help fund the Democratic governor's proposed six-year, $41.5 billion capital plan that lawmakers have yet to approve.

Craft brewers, distributors and retail advocates held a news conference Friday morning to argue that beer already is taxed enough, and that adding more taxes will only make it harder for small businesses to expand.

From 2012 to 2019, the number of craft breweries in the state rose from 50 to 230, according to Danielle D'Alessandro, executive director of the Illinois Craft Brewers Guild.

She said that while Illinois' current tax on beer and cider is high compared to taxes in neighboring states, the industry was able to expand because "there's been stability."

"Brewers that are opening can predict and know what their costs are going to be. An increase in the tax would not be helpful when they're considering expanding," D'Alessandro said.

Rob Karr, head of the Illinois Retail Merchants Association, said the state already loses about $8.5 million in tax revenue each year from people who drive to bordering states to buy beer. The governor's tax proposal, he said, would bump that number up by an estimated $4.6 million.

The proposed tax increases on beer, cider, wine and liquor are just one category of the 10 new or increased tax proposals to provide $1.8 billion in annual revenue to help fund the governor's capital plan.