An Act To Strengthen Maine's Craft Brewing Industry
Maine Legislature, Session 122, LD 1929
Committee: Legal and Veterans Affairs
Sponsors: EDMONDS

Legislative Document 
No. 1929 
S.P.729 
In Senate, January 4,2006 
An Act To Strengthen Maine's Craft Brewing Industry 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Reference to the Committee on Legal and Veterans Affairs suggested and ordered printed. 
Presented by President EDMONDS of Cumberland. 
Printed on recycled papel 
JOY J. O'BRIEN 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 28·A MRSA §1355, sub·§10 is enacted to read: 
10. 
Contract brewers. 
A person who is licensed by the 
bureau 
may 
contract 
with 
a 
brewery 
or 
small 
brewery 
to 
manufacture that person's malt liquor. 
The bureau, 
by rule, 
shall establish the licensing criteria and cost of the license. 
Rules adopted pursuant to this subsection are routine technical 
rules pursuant to Title 5, chapter 375, subchapter 2-A. 
Sec. 2. 28·A MRSA §l653 is enacted to read: 
§1653. 
E~rt tax credit 
A brewer is eligible for a credit against the excise tax 
imposed pursuant to this chapter as provided in this section. 
1. 
E1igibi1ity. 
A brewer is eligible for a credit under 
this section if the brewer: 
A. 
Is licensed to and in fact does manufacture malt liquor 
in this State; 
B. 
Exports malt liquor for sale outside this State; and 
c. 
Pays excise taxes imposed pursuant to section 1652. 
2. 
~t of credit: schedY,1e. 
A brewer eligible under 
subsection 1 is entitled to a credit in the amount of 17. 5¢ per 
gallon of malt liquor manufactured in this State and exported for 
sale outside this State, calculated annually for each year the 
credit is claimed: 
A. 
For 
the 
first year, 
on 
90% 
of 
the 
total 
amount 
manufactured and exported; 
B. 
For 
the 
2nd 
year, 
on 
80% 
manufactured and exported, 
plus 
an 
17.5¢ per gallon on the amount in 
of 
the 
total 
amount 
additional credit of 
excess of 110% of the 
amount 
manufactured 
and 
exported 
in the first year 
of 
participation; 
C. 
For 
the 
3rd 
year, 
on 
70% 
manufactured and exported, 
plus 
an 
17.5¢ per gallon on the amount in 
amount 
manufactured 
and 
exported 
participation; 
of 
the 
total 
amount 
additional credit of 
excess of 110% of the 
in 
the 
2nd 
year 
of 
D. 
Fo~the 4th 
year, 
on 
60% 
of 
the 
total 
amoun~ 
manufactured 
and exported, 
plus 
an additional credit of 
17.5¢ per gallon on the amount in excess of 110% of the 
amount 
manufactured 
and 
exported 
in 
the 
3rd 
year 
of 
participation; 
E. 
For 
the 
5th 
year, 
on 
50% 
of 
the 
total 
amount 
manufactured and exported, 
plus 
an additional credit of 
17. 5¢ per gallon on the amount in excess of 110% of the 
amount 
manufactured 
and 
exported 
in 
the 
4th 
year 
of 
participation; 
F. 
For 
the 
6th 
year, 
on 
40% 
of 
the 
total 
amount 
manufactured 
and exported, 
plus an additional credit of 
17.5¢ per gallon on the amount in excess of 110% of the 
amount 
manufactured 
and 
exported 
in 
the 
5th 
year 
of 
participation; 
G. 
For 
the 
7th 
year, 
on 
30% 
of 
the 
total 
amount 
manufactured 
and exported, 
plus 
an additional credit of 
17.5¢ per gallon on the amount in excess of 110% of the 
amount 
manufactured 
and 
exported 
in 
the 
6th 
year 
of 
participation; 
H. 
For 
the 
8th 
year, 
on 
20% 
of 
the 
total 
amount 
manufactured 
and exported, 
plus 
an additional credit of 
17.5¢ per gallon on the amount in excess of 110% of the 
amount 
manufactured 
and 
exported 
in 
the 
7th 
year 
of 
participation; 
I. 
For 
the 
9th 
year, 
on 
10% 
of 
the 
total 
amount 
manufactured 
and exported, 
plus an additional credit of 
17.5¢ per gallon on the amount in excess of 110% of the 
amount 
manufactured 
and 
exported 
in 
the 
8th 
year 
of 
participation; and 
J. 
For the 10th year, on 17.5¢ per gallon on the amount in 
excess of 110'1-0 of the amount manufactured and exported in 
the 9th year of participation. 
A brewer may not claim a 
credit available pursuant to this 
subsection that exceeds the amount of excise taxes due from that 
brewer pursuant to section 1652. 
3. 
Rules; 
fo;f:'1lls. 
The bureau sh.a11 adopt rules necessary 
for the implementation of this section, including forms to be 
made 
available 
to 
brewers. 
Rules 
adopted 
pursuant 
to 
this 
subsection are 
routine technical rules pursuant to Title 5, 
chapter 375, subchapter 2-A. 
4. 
Re.peal. 
This section is repealed December 31, 2016. 
A 
brewer eligible under subsection 2 may file a claim for a tax 
credit pursuant to this section for the year 2016 no later than 
April 1, 2017. 
Sec. 3. 36 MRSA §S219-Y is enacted to read: 
§5219-Y. 
Brever.y eglQ%Ent tu credit 
1. 
Definitions. 
As 
used in this section, 
unless 
the 
context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
A. 
"Base year" means calendar year 2005 or the first year a 
brewer is in business, whichever is later. 
B. 
"Brewer" means a person who produces malt liquor. 
c. 
"Malt liquor" means liquor produced by the fermentation 
of malt, wholly or partially, or from any malt substitute, 
that contains 11 2 of 1 'l-o of alcohol or more by volume. "Malt 
liquor" includes, but is not limited to, ale, beer, porter 
and stout. "Malt liquor" includes beverages made with malt 
liquor, but to which no spirits are added. 
2. 
Credit allowed. 
A brewer that employs persons in this 
State for the manufacture of malt liquor in this State is allow~ 
a credit against the tax otherwise due under this Part in the 
amount of 
50~ of the taxes withheld pursuant to section 5250 for 
each 
employee 
employed 
in 
this 
State 
above 
the 
number 
of 
employees employed in this State by the brewer in the base year. 
3. Limitation. The credit allowed by this section may not be 
used to reduce a brewer's tax liability under this Part to less 
than zero. 
4. 
Co~rations filing combined return. 
In the case of 
.c.Qj"porations filing a combined return, a credit generated by an 
individual 
member 
corporation 
under 
the 
provisions 
of 
this 
section 
must 
first 
be 
applied 
against 
the 
tax 
liability 
attributable to that individual member corporation under this 
Part. A member corporation with an excess brewer employment tax 
credit may apply its excess credit against the tax liability of 
other 
group 
members 
to 
the 
extent 
that 
the 
other 
member 
corporations may use additional credits under the limitations of 
4.6 
subsection 3. 
5. Expiration of credit. The credit provided by this section 
may not be claimed for tax years beginning on or after January 1, 
2017. 
6. 
Rules. 
The bureau shall adopt rules to implement the 
provisions of this section. 
Rules 
adopted pursuant to this 
subsection are 
routine technical rules pursuant to Title 
5, 
chapter 375, subchapter 2-A. 
SUMMARY 
This bill provides tax incentives to malt liquor brewers to 
encourage them to increase their employment in Maine and the 
amount of malt liquor produced in Maine and exported for sale 
outside of Maine. 
Specifically, this bill: 
1. 
Provides a tax credit against the excise taxes imposed 
on alcohol manufactured and sold in Maine by a brewer equal to 
l7.5¢ per gallon of malt liquor manufactured and exported by that 
brewer. 
The percentage of malt liquor that is eligible for the 
credit is 90% of the amount produced and exported and is reduced 
by 
10'l-o each year. 
If a 
brewer increases its production and 
export of malt liquor by 10% in a year, an additional credit is 
allowed for the excess; and 
2. 
Provides a credit against the income taxes paid by a 
brewer equal to 50% of the payroll taxes withheld by that brewer 
for each employee employed in the State above the number of 
employees employed by the brewer in the State in 2005, or the 
first year of business of the brewer, whichever is later. 
80th the excise tax credit and the income tax credit expire 
on December 31, 2016. 
This bill also creates 
contracts with a brewery or 
person's malt liquor. 
a 
new lir.ense for 
a 
person 
small brewery to manufacture 
who 
that