By Kelsey Snell
Trendy craft beer sales are booming, and cities and states are hoping tax breaks will help them elbow their way into a seat at the bar.
Targeted tax breaks are a favorite tool for states looking to capitalize on a growing industry, and states from California to New York are all hoping to get a gulp of the estimated $250 billion economic boon brewers estimate they delivered in 2012. Lawmakers are doling out multimillion-dollar packages to keep and attract breweries.
But while the tax breaks flow, there is little evidence that these incentives are driving where craft brewers set up their businesses. Factors such as the availability of natural resources like water and the quality of the infrastructure needed to get the beer to the masses are likely playing a bigger role.
“You can never really know that the incentives actually changed the company’s behavior at all; more likely than not the incentives are just rewarding companies for activities they were going to do anyway,” said Matthew Gardner, executive director at the Institute on Taxation and Economic Policy.
