CHEERS Act would give tax breaks to businesses using draft beer systems

WASHINGTON, D.C. — Thor Cheston turned his love for beer into a craft brewery business in Washington, D.C.

Right Proper Brewing Company has two locations and is working to expand to a third.

But like so many other small businesses during the pandemic, there was a time when its future seemed uncertain.

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“When the city shut down, we lost 60 percent of our revenue overnight,” said Cheston. “That’s because 60 percent of our revenue was coming from the sale of draft beer to bars and restaurants, and so when the restaurants and bars closed, we lost all of that revenue.”

That’s why there’s now a proposal in Congress aimed at helping these small businesses as they work to recover from the pandemic.

The Creating Hospitality Economic Enhancement for Restaurants and Servers (CHEERS) Act would give tax breaks to businesses that use energy efficient draft lines and keg equipment.

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It has bipartisan support in the House.

“Many of our local businesses and the hospitality sector at-large are still facing economic challenges,” said Rep. Darin LaHood (R-IL), a sponsor of the bill. “This bipartisan bill will support these local establishments by incentivizing the expansion of tap lines and keg equipment on commercial premises.”

“The CHEERS Act would boost not only our smaller bars, clubs, and entertainment venues but also many of our casinos, hotels, and arenas,” said Rep. Steven Horsford (D-NV), another sponsor of the bill. “This will allow many small business owners in my district to grow their business and invest more in their employees.”

We asked Cheston about the impact this measure would have on his business.

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“It would be tremendous,” said Cheston. “It’s really important for our business model to be able to service draft beer.”

Even though a lot of business has returned for craft brewers, they’re still feeling the hit from the pandemic – especially when it comes to draft beer sales.

“Draft for example is still down 25 percent roughly since its pre-pandemic levels,” said Marc Sorini, General Counsel for the Brewers Association. “So that is a very, very difficult thing to overcome.”

The Brewers Association represents more than 5,400 brewers, craft beer retailers, and more.

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“The primary beneficiaries are going to be bars and restaurants. We want bars and restaurants to be installing more tap equipment, selling more draft beer because draft is very good for craft,” said Sorini. “We think [the CHEERS Act] is going to be very, very good for our members if it passes.”

Draft beer is often sold in reusable kegs, so they hold a lot more beer compared to bottles and cans, and it means lower production costs because packaging and shipping is much easier.

“From production to consumption, draft beer is much more energy efficient,” said Cheston.

The brewery industry is urging Congress to act fast to pass the CHEERS Act.

“It’s good for the economy as a whole,” said Cheston. “It’s absolutely huge for the industry.”

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