Big beer slump. (more reasons our CAT tax fails)

By Taxpayers Association of Oregon
OregonWatchdog.com

The once booming craft beer industry is now in decline.  Last year saw zero sales growth. This year saw a 2% decline.  This is troubling news for Oregon’s vast population of craft beer centered restaurants as restaurants are among the slimmest profit margin businesses which means they are extremely vulnerable to the smallest of downturns.   Alcohol sales are one of their top profit makers.

Because of this small consumer shift many breweries and brew-based restaurants are closing across Oregon.

• This week alone, Ecliptic Brewery closed multiple locations and sold off their rare beer archive.
• Three weeks ago, Eugene was cited for three breweries closing.
• Two months ago, KGW reported, Wave of breweries have either shut their doors or plan to close.
• The Oregon Brewers Festival just closed for good because of declining customers and rising costs.

That is the magic phrase in the closed Brewery Festival is “declining customers and rising costs”.  The declining customers are the decline in beer sales and the rising cost is the recent 2019 Oregon Corporate Activities Tax (CAT).

As breweries and restaurants lose money the CAT tax comes in and takes a big tax bite — even if a restaurant loses money.   The CAT tax taxes small businesses, even when they do not make a profit.  Taxing companies when they are down is why only a few states have such a tax (gross receipts tax).   Politicians love the tax because they get their guaranteed tax revenue even if there is a terrible recession or a wave of businesses collapsing into bankruptcy.

The CAT tax should be considered the “death-tax” because it taxes businesses as they are dying.

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