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Made in Michigan proposal could save breweries money
Tax credit designed to strengthen connections with local farms.
LANSING — Let the Germans make our beer? Michigan legislators say “no thanks” with a proposal to support the state’s own talented brewers.
Rep. Doug Geiss, D-Taylor, introduced a bill in the House recently, nicknamed the “Michigan farm to glass” bill, which could give Michigan brewers, winemakers and mead makers a tax credit for using crops grown or produced in the state.
The goal is to usher in a closer association between the farmers who grow the ingredients and the brewers who use them, Geiss said, and to help encourage use of Michigan crops with the surge of beer, wine and mead makers. Other states have proven that promoting the use of their crops increases the use of local hops, honey, wheat and other related crops, said Geiss, a home brewer and a member of the House Agricultural Committee.
Ken Schramm, owner of Schramm’s Mead in Ferndale, is very supportive of the measure.
“I’m a brand-new business, and I’m not an accountant and I’m not an attorney, but I saw a tax break and knew it would help out,” Schramm said. Saving money is especially important for Michigan brewers this year, since the rough winter could lead to a tough year for growers.
“We need to support them and us,” he said.
Jim Crank, owner of Cranker’s Brewery in Big Rapids, said he already buys local as much as possible, but having an incentive never hurts. He thinks all the brewers in Michigan will be in support of this bill. “The bill just makes sense,” he said.
The bill, cosponsored by both House Democrats and Republicans, would also create a label for alcohol containers to designate that the beverage is Michigan-made.
“Right now there’s nothing to let you know where the ingredients are from in the beer you’re consuming,” Geiss said. The logo would create the branding for those products in the state.
Rep. Scott Dianda, D-Calumet, one of the cosponsors of the bill, said it supports job creation.
Along those lines, Rep. Marcia Hovey-Wright, D-Muskegon, another cosponsor of the bill, said it would promote small business growth, especially in her district, where two breweries are opening this year.
“The craft beer industry in Muskegon is a growing industry, and it’s growing statewide,” Hovey-Wright said. “This bill helps business that is budding and needs to blossom.”
The “absolute explosion” of microbreweries and brewpubs across the state following a change in Michigan laws 20 years ago was what prompted him to bring this bill forward, Geiss said.
Before that change, the state only had two or three breweries, said Scott Graham, executive director of the Michigan Brewers Guild. Michigan now has more than 150 licensed breweries — the most in the state’s history.
The Michigan Brewers Guild, which has 121 members, has been trying to stimulate growth in both industries for years, Graham said, and he thinks this could lead to more secure and profitable crops.
The tax credit is given to brewers if 20 percent of the hops used are grown in Michigan, and to other alcoholic beverage producers if they use 40 percent of other Michigan crops. For the first 500 gallons produced, brewers are awarded 18 cents per gallon in tax credit, and for every 14.5 million gallons after that, 4 cents per gallon is awarded.
The bill is pending before the House Regulatory Reform committee.