What Brews to Barns Could Mean for Your Brewery’s Tax Bill

You already give your spent grain to a local farmer. You pay to store it, handle it, and sometimes haul it, and you get nothing back. The Brews to Barns Act, introduced in Congress today, would change that. The bill gives breweries a federal excise tax credit of 8 cents for every pound of spent grain donated for agricultural use, up to $35,000 a year.

The BA estimates the legislation could return up to $38 million annually to small and independent craft brewers, providing much-needed financial relief at a time when rising operating costs and challenging market conditions continue to pressure brewery margins.

How Does Brews to Barns Work?

Every batch of beer produces spent grain, the nutrient-rich material left over after the brewing process. While it is no longer useful for brewing, spent grain retains significant agricultural value as livestock feed, soil amendment, and other farm uses. Many breweries have longstanding relationships with local farmers who collect this material for use in their operations, often at little or no cost.

The Brews to Barns Act would establish a federal excise tax credit of 8 cents per pound of donated spent grain, up to $35,000 per brewery annually. Rather than providing a deduction from taxable income, the credit would directly reduce the federal excise taxes a brewery owes.

For many small breweries, this could mean eliminating their federal excise tax liability entirely.

Consider a brewery producing 2,500 barrels of beer annually. At the reduced federal excise tax rate of $3.50 per barrel, that brewery would ordinarily owe $8,750 in federal excise taxes. Under Brews to Barns, assuming it donates all its spent grain for qualifying agricultural use, the brewery could generate enough credits to eliminate that entire obligation.

A brewery producing 5,000 barrels could potentially save $17,500 annually, while larger breweries could qualify for as much as $35,000 in annual savings. The credit would be limited to a brewery's federal excise tax liability, meaning it would reduce taxes owed rather than result in a payment beyond that amount.

Why Should Brewers Care?

Brews to Barns would provide direct financial relief without requiring most breweries to make major changes to their operations or undertake expensive new investments. The savings could help brewers cover payroll, repair aging equipment, purchase new brewing systems, or support other business priorities.

Importantly, the legislation would recognize a practice that most breweries already follow. Approximately 90% of spent grain generated by American breweries is already reused, primarily for agricultural purposes.

While the largest brewers often have sufficient volume and infrastructure to sell their spent grain commercially, smaller breweries generally lack those opportunities. Many instead donate their grain to farmers, absorbing the associated storage, handling, and transportation expenses without receiving compensation.

Brews to Barns would help level that playing field by providing a financial benefit to breweries that already contribute valuable agricultural resources to their communities. The legislation would also strengthen brewer-farmer partnerships by helping agricultural producers access affordable livestock feed or fertilizer while keeping spent grain in productive use.

Get Involved!

The introduction of Brews to Barns in the House represents an important first step toward securing additional tax relief for America's small and independent brewers.

The BA will continue working with the legislation's bipartisan sponsors to build congressional support and advance the bill through the legislative process.

Brewers should anticipate imminent launch of a grassroots write-in campaign to contact their members of Congress and encourage them to cosponsor the Brews to Barns Act. Sharing firsthand examples of spent grain partnerships and explaining how the proposed tax savings could benefit their businesses will be particularly valuable as the BA works to move the legislation forward. Brewers can use our calculator to estimate their annual savings.