Efforts to form Idaho beer commission could change direction

By Sean Ellis

Idaho Farm Bureau Federation

BOISE – Efforts to form an Idaho beer commission might take a different turn, but with the same goal: to promote craft beer produced in the state.

Several different ideas that have been floated to promote Idaho craft beer all revolve around using $140,000 from an excise tax on strong beer that currently goes to the Idaho Wine Commission.

The idea has been discussed for a few years now and early in those discussions, the talk centered around forming a beer commission to use that $140,000 to promote craft beer in Idaho.  

Besides forming a beer commission, other ideas to accomplish that include directing the money to an existing commission, such as the hops or barley commission, or having an existing state agency use the money to promote craft beer in Idaho.

In 1988, Idaho Code deemed beer over 5 percent alcohol by volume to be wine and the excise tax on that product was the same as wine: 45 cents a gallon.

Five percent of the money raised from that tax on strong beer – about $140,000 during the most recent fiscal year – has been going to the wine commission.

The state’s fast-growing craft brewing industry would like to redirect that money toward the promotion of craft beer in Idaho, said David Arkoosh, a Boise attorney who represents the Idaho Beer Alliance, which includes craft brewers and retailers.

“The Idaho Beer Alliance’s members want to find a way to take that beer excise tax money that they’re paying and put it to work marketing craft beer produced here in the state of Idaho,” he said.

Idaho Brewers United, which represents craft brewers in the state, supports forming a beer commission to promote Idaho suds, said executive director Sheila Francis.

“I think having a beer commission that is focused on promoting beer would be a good idea,” she said. “But there are some others out there with different thoughts. We’re open to all the other ideas out there.”

Arkoosh said stakeholders have stepped back from efforts to form a beer commission because of an executive order signed by Gov. Brad Little in January that seeks to reduce government regulations.

“We’re reticent to expand state government if it’s not necessary, so we’re trying to be as efficient as possible while still providing the same benefit to brewers of beer,” he said.

Arkoosh said stakeholders will continue to meet this year and the hope is that the group can unanimously or near unanimously agree to support draft legislation during the 2020 Idaho legislative session, which will convene next January.

Marissa Morrison, Little’s press secretary, said the governor “supports finding a broadly accepted solution on where to direct the beer tax funds. He looks forward to consensus among industry representatives as they work through options.”

When Idaho began allowing, and taxing, beer above 5 percent alcohol in 1988, there was no craft brewing industry in Idaho. There are now 68 breweries in the state and Idaho also leads the nation in malt barley production and is No. 2 in hops production.

A recent explosion in Idaho hop acres has been largely due to demand from the craft brewing industry.

“Since that time, craft brewing has exploded and it’s a much more robust industry now than it was in 1988,” Arkoosh said. “We think it’s time to start giving Idaho’s craft beer industry some representation.”

Francis said nobody faults the wine commission for receiving that money because there was no craft brewing industry in Idaho in 1988; plus, the IWC has put the money go good use in helping promote Idaho’s wine industry.

There were 10 wineries in Idaho in 1997 and there are 52 now.

“It’s not their fault they have the money,” Francis said. “But part of the money they receive comes from beer and we would like to use the money to promote Idaho beer.”

If the $140,000 in funds that comes from the strong beer excise tax is used to promote beer, that would result in a substantial hit to the wine commission’s annual budget of $700,000, which includes $300,000 that comes from specialty crop grants the commission has received.

IWC Executive Director Moya Shatz-Dolsby said she has no problem with the beer industry getting that $140,000 to promote their product.

“We fully support the beer industry and want to see them have success,” she said. “I really think that money needs to go to support them.”

But she also said her goal is to keep the wine commission funded at its current level because if it’s not, it would result in a significant reduction in the commission’s marketing, education and research funds and it could result in a staff reduction. 

It could also put in jeopardy the matching funds the commission provides on the $300,000 worth of specialty crop grants it currently has.

Shatz-Dolsby said that in order to keep the wine commission whole, she might ask legislators to increase the IWC’s share of the wine excise tax it receives from the state.

The state’s wine excise tax is 45 cents a gallon and the commission currently gets 2 cents from every gallon sold. The commission would have to raise its share of what it gets from that tax about 10 percent to make up the difference from losing $140,000.