That pint of craft beer could cost more next year

FRANKLIN COUNTY - Pennsylvanians looking to enjoy a pint of their favorite craft beer soon might be paying a little extra. 

Beginning next summer, the Pennsylvania Department of Revenue will change how it taxes craft brews by taxing malt and brewed beverage manufacturers that sell retail products out of their establishments effective July 1. 

The tax will primarily affect manufacturers or holders of a “G” license as designated by the Pennsylvania Liquor and Control Board. These businesses may also obtain a brewery pub license - or a "GP" license - for onsite consumption and sale. 

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Under this change, "GP" holders will be required to levy a tax of 6 percent on every retail dollar they sell, a move that largely affects breweries that offer beer on-site or have a taproom. However, the same pint will remain untaxed at restaurants based on how the law is structured. 

In other words, a $6 beer at GearHouse Brewing Co. could cost about $6.36 next year, according to the company's vice president, Erin Miskell. The Chambersburg-based brewery opened about two years ago, and offers a variety of ales and lagers. 

Because the brewery doesn't currently impose this kind of tax, Miskell said it would have to pass it on to consumers by either raising the overall price of beer to cover the sales tax or charging 36 cents more for every glass. 

Although the increase wouldn't deter the vice president if she were a consumer, she said there will be customers who spend less money at the brewery. This could in turn then lead to a decline in sales. 

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GearHouse isn't only local beer operation in the county. It is one of several craft brands area residents can choose from, along with Roy-Pitz Brewing Co. in Chambersburg and Appalachian Brewing Co., which has a brewpub in Shippensburg. 

And these are just a few of the 282 craft breweries in the state, according to 2017 data from the Brewers Association. Over the past six years, the number of breweries opening across the state has steadily increased. In addition, Pennsylvania ranked first in the country for producing 3,724,010 barrels of craft beer a year. 

President of the Greater Chambersburg Chamber of Commerce, Stephen Christian, said generally chambers are opposed to additional taxes like this, with this change appearing to target an industry that encourages entrepreneurship in the state. 

"The craft beer industry and the folks here in Chambersburg who participate in that industry - like Roy Pitz and GearHouse - are emblematic of that entrepreneurial spirit and have participated in the growth of that industry," he said. Christian added the chamber isn't "pleased with the fact that there appears to be additional taxes being focused squarely on them." 

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Even though she knows there are gaps in Pennsylvania's budget, Miskell said going after an industry that brings jobs to the area and serves local communities is a "really unfortunate attempt to close budget gaps." 

Craft breweries are also a draw for younger people in a state that is already struggling to present itself as a place people should want to stay, Miskell added. She said asking people who are already "penny-pinching" to spend more could "have a negative broader impact on the community at large." 

"There will be businesses who cannot survive this, and I believe that we will lose breweries over this," Miskell said. 

Christian said it doesn't make sense to him why this tax is being imposed on an industry that is thriving, and could potentially curtail its success and sales. 

"If the goal is economic growth, I just can't see that adding those additional taxes - or any additional burdens - on businesses is a good method for encouraging it." 

Have a story or want to submit a tip? Contact Ashley Books at 717-262-4764 or email abooks@gannett.com.