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Klobuchar promotes microbrewery tax cut during Duluth visit

Duluth Mayor Emily Larson, Minnesota Sen. Amy Klobuchar and Canal Park Brewing's lead brewer Ryan Woodfill gaze at the first thing that catches the eye in the brewery's production area — a statue of Yoda. Klobuchar toured the brewery Monday while promoting a tax cut for craft brewers. (Brooks Johnson / bjohnson@duluthnews.com)

There was no promise of free beer, but we're getting closer: Sen. Amy Klobuchar came to Duluth on the third of July to promote a tax cut for microbreweries she is sponsoring in Congress.

"These are jobs that are right in the U.S. They're not going to go elsewhere," the Democrat said about targeting small beermakers during a tour of Canal Park Brewing on a busy Monday afternoon. "One of the things we need to do is encourage more of these small businesses and especially these small breweries."

The legislation — The Craft Beverage Modernization and Tax Reform Act — would cut the existing per-barrel tax in half for the first 60,000 barrels produced. That would bring the per-barrel tax to $3.50 for most of the production of all but the largest breweries in the country.

"It's a big deal for us," Canal Park Brewing owner Rockie Kavajecz said.

In Minnesota, only the largest craft breweries — such as August Schell, Summit, Third Street and Surly — brew more than 60,000 barrels per year. Canal Park produces about 1,200 barrels a year, all sold on site; Bent Paddle Brewing Co. sells about 25,000 barrels per year on-site and throughout the region.

Yearly production, and the number of breweries, could continue to grow as the state's craft beer market matures.

"There are more breweries operating in Minnesota today than there were in the entire country (in 1978)," Sen. Klobuchar said.

Though the tax cut has been introduced before, Sen. Klobuchar said it is possible the proposal will pass as part of broader tax reform expected to move through Congress this year.

Brewers certainly hope it does, with the Beer Institute trade group saying taxes are "the most expensive ingredient in beer today."

The senator was bound for the Iron Range following her Duluth stop to spend the Fourth of July up north.

Brooks Johnson

Brooks covers business and the economy for the Duluth News Tribune.

(218) 723-5329
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