Tuesday, July 22, 2014 · 9:45 p.m.
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Businesspeople across the state are working with lawmakers to change the definition of beer in an effort to boost the industry.   

Currently, state law mandates that anything that has 5 percent alcohol by weight (6.2 percent alcohol by volume) be taxed as liquor at 24.25 percent. 

Many craft beers fall in that range. 

Fix the beer cap

Click here for the "fix the beer cap" website. 

And the current law means that any product in that category must be sold through liquor distributors and that restaurants must have a liquor license to sell it. 

"If you want a high-gravity beer, you can only buy it through a liquor store," President of the Tennessee Craft Brewers Guild Linus Hall said. "Compared to the states surrounding us, all others have either no alcohol cap or it's up to 12-15 percent. As a brewer, it puts you at a competitive disadvantage, and it really limits the consumer's choice."

Hall is also the owner of Nashville's Yazoo Brewing Company. 

The brewers guild formed in 2011, and members had two items on the legislative agenda. First, they wanted to change the way wholesale beer was taxed. 

Opposition?

Do you oppose these bills? Want to share your thoughts? Please email Chloe.Morrison@Nooga.
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to share your perspective. 

They did that last year. Gov. Bill Haslam signed the Beer Tax Reform Act of 2013 in April.

That law changed the structure of the state's 17 percent tax on beer, according to archives. Now, it's taxed on volume, not price. 

So next on the agenda is changing the definition of beer. 

And leaders have moved from a "fix the beer tax" campaign to efforts to "fix the beer cap."

There are bills in the works aimed at making this change—Senate Bill 2095 and House Bill 1983

Sponsors of each bill, Sen. Mark Green, R-Clarksville, and Rep. Cameron Sexton, R-Crossville, couldn't be reached for comment on the proposals. 

Hall said that both bills aim to redefine the alcohol content of what is classified as beer. The federal government doesn't have a cap and instead judges beer on how it's manufactured. 

Hall said that when the issues are brought up in committees, leaders will probably negotiate about the definition. But the goal is to bring Tennessee more in line with other states. 

As it is now, Tennessee has the most restrictive beer cap in the Southeast. And that means consumers have fewer local choices, tax revenues are limited, and business is more difficult for craft beer entrepreneurs.

Chattanooga resident, home brewer and craft beer lover Andrew Perzell said that he has to go over the state line into Georgia to get some beers that aren't offered in Tennessee because of the cap. 

"I am not the only one that does this," he said via email. "Most craft beer drinkers in Chattanooga know about Beverage World in Fort Oglethorpe and trek that way if they want good, higher alcohol (high-gravity) beer. By increasing the beer cap, Tennessee will see an increase in state revenue from beer sales instead of allowing bordering states to reap the rewards of lighter beer laws."

John Carr, The Flying Squirrel's beer manager; Chattanooga Brewing Company's Mark Marcum; and owner of Heaven and Ale Joe Winland all recently spoke on this issue. Click here to read what they said.

And Marsha Sturm, owner of SturmHaus, said she hopes to see the law changed because it would help businesses. She also mentioned that she knows of people going to Fort Oglethorpe to get beer. 

"Beer is brewed," she said. "That should define it, not the alcohol content."

If the law were changed, that would "open up more of a range of beers for us to sell," Sturm said. 

Increasing the cap would boost the craft beer industry in the state and allow brewers to be able to distribute high-gravity beer without getting additional licenses. 

"Taxes from sales would more than make up for the loss the state would feel from the licensing change," he said. 

Changing the law could also draw in new breweries to the state. 

Current laws are holding the state back, he also said.

"With the current cap, breweries have to use a beer distributor for anything considered low gravity and a liquor distributor for anything high gravity," he said. "This makes marketing to Tennessee more tedious and expensive for breweries. By changing the cap, most breweries would only need to go through a beer distributor to get their beers to market."
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