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Local breweries save thousands with Federal Excise Tax break and want to see it continue

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MACHESNEY PARK (WREX) — Illinois breweries have 26 days until a tax break expires. That's why hundreds of small businesses are coming together to ask congress for an extension.

For Shane Johnson, expanding Pig Minds in Machesney Park is going to make a huge difference in the way it does business.

"We are getting ready to expand our brewing capabilities, add a canning line so we can get a bigger footprint out and keep up with demand. We have a problem with keeping up with demand with two of our beers, especially in the summer time. This is going to alleviate that problem," said Pig Minds General Manager Shane Johnson.

One way the brewery was able to expand is with a little help saved from the Federal Excise Tax (FET) rate. The Illinois Craft Brewers Guild says since 2017, the tax break has saved breweries money by lowering the cost of barrels from $7 each to $3.50 each.

"The savings that they're seeing from the reduction, the excise tax, is not going towards shareholders. It is being reinvested back into the brewery itself and back into their employees," said Illinois Craft Brewers Guild Executive Director Danielle D'Alessandro.

But without the tax break breweries would pay more in taxes next year.

"We would either have to find a way to get together with the team and how are we going to increase our sales to make up that money or what are we going to cut out of the mix a little bit because we don't have that money any longer," said Johnson.

When it comes to having more money that can be spent in house, Generations Brewery Company in Freeport says it can't hurt.

"Every dollar and every dime that we can save is only going to help us out more in the long run," said Generations Brewery Co. Master Brewer and Co-owner Steven Winter.

"But than also providing jobs and what you're also seeing then is a revitalization in some of those areas as well," said D'Alessandro.

Saving nearly $3,000 this year, Pig Minds is one among those that want to see the tax break continue.

"Our owners do a great job in reinvesting back into the company. As long as you're doing that with that money, it's a great benefit for any small businesses," said Johnson.

The Illinois Craft Brewers Guild says it hopes congress will either extend the FET or pass the Craft Beverage Modernization and Tax Reform Act by the end of this year.

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Cassandra Bretl

Multimedia Journalist
Cassandra is the morning reporter for 13 News Today.
She joined the WREX team in July of 2019 after graduating from the University of Wisconsin – Milwaukee with a major, minor and a certificate.
She is excited to bring her skills back to the 815 where she is originally from.
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