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State brewers concerned over impact of governor’s tax plan

MORGANTOWN — Gov. Jim Justice wants to phase out personal income taxes in West Virginia through HB 2027, but breweries are concerned over how the bill would impact the industry. 

“After having to completely readjust business just to deal with the pandemic, this just seems like another black eye to our industry,” said Aaron Rote, co-owner of Short Story Brewing in Rivesville and president of the WV Craft Brewers Guild.

Del. Evan Hansen, D-Monongalia, said to significantly reduce the state’s personal income tax, the bill proposes increases in other taxes. 

This includes a 431% excise tax increase within the craft beverage industry, raising the beer barrel tax on each 31-gallon barrel from $5.50 to $29.25.

Hansen said until it is confirmed whether this bill or a committee substitute will run, he cannot make a firm decision on whether he is for or against it; however, he said as the proposed bill stands now, he has some concerns.

“In general, one of my concerns is it takes a progressive income tax and replaces it with a number of regressive taxes,” Hansen said. “So, there is going to be a shift in who pays taxes to the state away from people who can afford it more towards people who cannot afford it as much.”

The Dominion Post reached out Mon County Delegates Barbara Evans Fleischauer, Danielle Walker, Joe Statler, and Sen. Bob Beach, as well Justice’s office but none were available to respond in time for this report.

Bill Rittenour, owner of Chestnut Brew Works, said his business produces about 800 barrels of alcohol per year. The current beer barrel tax costs Rittenour an average of $4,400 per year, and the proposed bill would increase this cost to about $23,400.

Chestnut Brew Works, in Morgantown’s Greenmont neighborhood, opened in 2013 and was the seventh brewery to open in the state. Rittenour said the number of breweries across West Virginia has continued to increase, but this bill would create additional burdens and barriers, potentially stagnating a growing industry. 

“I know all these brewers, and none of them are like fat cats sitting high-up in a penthouse in New York,” Rittenour said. “I have three kids. I live in a modest house right next to the brewery, and, especially this past year, I have had to make things work. Many of the other brewers are just like me.”

Rote said his brewery opened just over 3 years ago. COVID-19 has taken a toll on the brewery and said this bill would be another blow to the business. 

As a relatively new brewery, Rote said prior to this year, it was at the stage of finding its rhythm in the community. When the COVID-19 pandemic hit, he said it felt like a reset period. 

Along with altering the brewery’s tap room and adding an outdoor space to ensure social distancing was possible, the need to switch canning beer created additional expenses. If the proposed bill is passed, Rote said it could significantly impact their goals to grow the business.

“There’s three owners of Short Story and none of us have ever been paid a penny for this business,” Rote said. “Any thought of maybe making a little bit of money or starting to do something above and beyond paying our bills, that’s pushed off even further into the future if it even happens at all.”