House lawmakers introduced a bipartisan bill to give small brewers a federal tax credit for donated spent grain

Two members of the House Ways and Means Committee introduced bipartisan legislation on Thursday that would create a federal tax incentive for small breweries that donate spent grain to local farmers, an effort supporters say could cut costs for brewers and agricultural producers while keeping usable material out of landfills.

Rep. Mike Kelly, a Pennsylvania Republican who chairs the Ways and Means Subcommittee on Tax, and Rep. Brad Schneider, an Illinois Democrat and member of the full committee, announced the measure in Washington. The bill is called the “Brews to Barns Act.” If enacted, it would establish a credit against the federal excise tax on beer for small brewers that donate spent grain for local agricultural use.

Spent grain is the grain left over after the brewing process. Breweries often give it to nearby farms, where it can be used as livestock feed or for other agricultural purposes. The bill is aimed at making that practice easier to sustain for smaller brewers, which often operate with tight margins and face transportation, storage, and handling costs when moving the byproduct off-site.

The proposal drew support from lawmakers in both parties and from committees that oversee tax, agriculture, and small business issues. Additional co-sponsors include House Agriculture Committee Chairman Glenn “GT” Thompson, a Pennsylvania Republican; Rep. Marilyn Strickland, a Washington Democrat and co-chair of the House Small Brewers Caucus; and Reps. Jeff Hurd of Colorado, John Larson of Connecticut, and Josh Riley of New York.

In the announcement, Kelly said local breweries and farms are both small businesses that play an important role in their communities and argued that the bill would encourage cooperation between them while strengthening local supply chains. Schneider said brewers and farmers are among the businesses dealing with higher costs and described the measure as a way to reduce waste and ease some of that pressure.

Thompson, whose home state has a large brewing and farming base, said many Pennsylvania brewers already work with farmers and ranchers to put spent grain to use in agricultural production. He said the tax incentive could build on those existing relationships and help lower input costs for producers. Strickland said the measure would lower costs for small brewers, benefit farmers and ranchers, and reduce landfill waste.

The bill also has backing from industry groups and brewery operators that already donate spent grain. Jason Lavery, co-founder of Lavery Brewing Company in Erie, Pennsylvania, said the grain left after brewing still contains nutrients that farmers can use to feed livestock, but moving it to farms takes time and resources. He said tax relief tied to those donations could allow breweries like his to reinvest in employees, equipment, and operations while continuing to support local farms.

Bart Watson, president and chief executive of the Brewers Association, said relationships between breweries and local farmers have long been part of the industry and that spent grain donations can turn a brewing byproduct into a useful farm resource. He said the legislation recognizes those partnerships and could help preserve them.

The measure arrives as many small breweries continue to face cost pressures tied to ingredients, packaging, labor, distribution, and financing. For the beverage sector, the proposal matters beyond a narrow tax change. If it advances, it could offer small brewers a way to offset some operating expenses tied to waste removal and byproduct handling, while also reinforcing a local sourcing and reuse model that links beer production to nearby agriculture. That kind of incentive could be especially meaningful for independent craft breweries that rely on close ties to local communities and suppliers.

The bill also reflects a broader policy interest in circular economy practices, in which materials that would otherwise be discarded are reused in other parts of the local economy. In this case, spent grain from beer production can move from a brewery to a farm instead of entering the waste stream. Supporters of the legislation argue that a tax credit could make those transfers more practical and more common, especially for smaller operations that do not have the same transportation or storage capacity as larger brewing companies.

The lawmakers’ announcement did not include a public estimate of the bill’s budget cost or say when the measure might receive committee action. Its introduction, however, places another small-business tax issue before the Ways and Means Committee at a time when lawmakers from both parties have been looking for narrower, industry-specific incentives tied to domestic production, local supply chains, and waste reduction.

Because the bill targets the federal excise tax on beer, its effects would fall most directly on qualifying small brewers rather than on the broader alcohol industry. Even so, the proposal could be watched closely across beverage manufacturing, where producers of beer, wine, spirits, and nonalcoholic drinks have all faced questions about waste, sustainability, and input costs. For breweries in particular, the measure would try to turn an existing local practice into a tax-recognized business activity, with benefits that supporters say could extend from brewhouses to barns.