The CBMA reduced rate, explained with numbers
A domestic brewer producing 2,000,000 barrels a year or less pays $3.50 a barrel on the first 60,000 barrels removed in a calendar year and $16.00 a barrel on barrels 60,001 to 2,000,000. The calculator below is prefilled with a return that crosses the 60,000 line.
| Barrels removed taxpaid | 1,000 bbl |
| at $3.50/bbl | 500 bbl |
| at $16.00/bbl (over 60,000 this calendar year) | 500 bbl |
| Federal excise tax | $9,750.00 |
| Effective rate per barrel | $9.75 |
| Per US gallon | $0.3145 |
| Per case of 24 x 12 oz | $0.7077 |
| Per 16 oz pint | $0.0393 |
| Tax for the calendar year so far | $218,000.00 |
| Filing frequency at that annual tax | semimonthly |
Runs in your browser; nothing you type is sent anywhere. Arithmetic for your records, not tax advice.
The tier is per calendar year, not per return
Say 59,500 barrels were removed taxpaid earlier in the year and this return covers 1,000 more. Only 500 of them still fit in the reduced tier: 500 x $3.50 + 500 x $16.00 = $9,750.00. Computing each return as if it started from zero would understate it. The calculator's "barrels already removed this year" field exists for this.
Effective rate by annual volume
| Barrels a year | At $3.50 | At $16.00 | Total tax | Average per barrel |
|---|---|---|---|---|
| 10,000 | 10,000 | 0 | $35,000.00 | $3.50 |
| 30,000 | 30,000 | 0 | $105,000.00 | $3.50 |
| 60,000 | 60,000 | 0 | $210,000.00 | $3.50 |
| 61,000 | 60,000 | 1,000 | $226,000.00 | $3.7049 |
| 75,000 | 60,000 | 15,000 | $450,000.00 | $6.00 |
| 100,000 | 60,000 | 40,000 | $850,000.00 | $8.50 |
| 250,000 | 60,000 | 190,000 | $3,250,000.00 | $13.00 |
| 500,000 | 60,000 | 440,000 | $7,250,000.00 | $14.50 |
| 1,000,000 | 60,000 | 940,000 | $15,250,000.00 | $15.25 |
| 2,000,000 | 60,000 | 1,940,000 | $31,250,000.00 | $15.625 |
What this does not cover
Only the federal rates above, for a brewer that qualifies as stated (domestic, 2,000,000 barrels or less a year). Source: TTB tax rates. State beer taxes are separate and not covered here. This is arithmetic for your records, not tax advice.
Questions
What is the reduced federal excise rate on beer?
$3.50 a barrel on the first 60,000 barrels removed in a calendar year, for a domestic brewer producing 2,000,000 barrels a year or less. Barrels 60,001 to 2,000,000 are $16.00.
Does the 60,000 barrel tier reset each return?
No. It counts barrels removed in the calendar year, so a return that crosses 60,000 splits between the two rates.