Breweries & Distilleries, CPA & Tax Services

Why Breweries and Distilleries in Dallas Need a CPA Who Knows the Industry

Running a brewery or distillery in Dallas-Fort Worth means dealing with a tax structure that most CPAs have never touched. Between federal excise taxes with multiple rate tiers, Texas Alcoholic Beverage Commission (TABC) compliance costs, and the unique challenge of tracking inventory that transforms through fermentation or distillation, your books are nothing like a typical small business. One miscalculated excise tax payment or misclassified taproom transaction can cost you thousands in penalties or missed deductions.

At AG Freideman, we work with brewery and distillery owners across Dallas, Plano, Frisco, and the surrounding DFW area who need a CPA that actually understands their production model, their margins, and their regulatory burden. Al Freideman handles every client personally, with 30+ years of experience and 52 five-star Google reviews, so you get real expertise from day one instead of being handed off to a junior associate learning your industry on your dime.

How Do Federal Excise Tax Tiers Affect Your Brewery or Distillery?

Federal excise tax is likely your single largest tax obligation outside of income tax, and the tiered rate structure creates both risk and opportunity that your CPA must understand. The Craft Beverage Modernization Act, made permanent in 2020, sets reduced rates for smaller producers, but calculating your liability correctly requires precise production tracking throughout the year.

For breweries, the federal excise tax rate in 2026 breaks down as follows:

• First 60,000 barrels: $3.50 per barrel (down from $18.00 per barrel at the standard rate) for domestic brewers producing under 2 million barrels annually
• Barrels 60,001 through 2 million: $16.00 per barrel
• Over 2 million barrels: $18.00 per barrel

For distilled spirits, the tiers are even more consequential because the base rates are higher:

• First 100,000 proof gallons: $2.70 per proof gallon (reduced from $13.50)
• Proof gallons 100,001 through 22,230,000: $13.34 per proof gallon
• Over 22,230,000 proof gallons: $13.50 per proof gallon

The difference between the reduced rate and the standard rate represents massive savings for smaller Dallas craft producers, but you only qualify if your production records are airtight. We reconcile your production logs with your TTB (Alcohol and Tobacco Tax and Trade Bureau) filings to make sure you are claiming the correct tier and paying exactly what you owe.

What TABC Compliance Costs Can You Deduct?

Every dollar you spend on TABC licensing, permit renewals, mandatory label approvals, and compliance training is a deductible business expense, and most brewery owners undercount these costs. Texas requires separate permits for manufacturing, distributing, and operating a taproom, and each comes with its own fees and renewal timelines.

Beyond the direct permit costs, TABC compliance generates indirect expenses that are also deductible: staff time spent on mandatory record-keeping, label registration fees submitted to the TTB, required surety bonds, and even the cost of hosting TABC inspections (cleaning, preparation, lost production time). We track all of these line items so nothing falls through the cracks at tax time.

Texas also imposes its own excise-level taxes on alcoholic beverages. Beer is taxed at $6.00 per barrel by the state, and distilled spirits face a state gross receipts tax. These state-level obligations sit on top of your federal excise taxes, which means your total tax burden per unit produced is higher than most CPAs estimate when they have not worked with this industry before.

How Should You Handle Taproom vs. Distribution Revenue?

Taproom sales and distribution sales have fundamentally different margin profiles, and your accounting system needs to separate them clearly. Taproom pours typically carry gross margins of 70% to 85%, while kegs and cans sold through distributors often land between 30% and 50% after accounting for distributor markups and delivery costs. If your books lump these revenue streams together, you cannot make informed decisions about where to invest.

From a Texas sales tax perspective, taproom sales require you to collect the full 8.25% combined rate (6.25% state plus up to 2% local) on every pour, flight, and to-go purchase. Distribution sales to licensed retailers may have different tax treatment depending on the transaction structure. We set up your bookkeeping to track taproom and distribution as separate revenue centers so your financial statements actually reflect reality.

Why Does Ingredient Inventory Create Accounting Problems?

Brewery and distillery inventory is among the most complex in any industry because raw ingredients transform through production into a completely different product with a completely different value. Grain, hops, yeast, water, and adjuncts enter your facility at one cost basis, then become work-in-process during brewing or distillation, and finally become finished goods sitting in tanks, barrels, or cans.

The IRS requires producers to use an inventory accounting method that properly captures this transformation. You need to account for:

• Raw materials: grain bills, hops, yeast, botanicals, fruit, barrels, and packaging
• Work-in-process: beer in fermentation, spirits aging in barrels (which can sit for years)
• Finished goods: packaged product ready for sale or distribution
• Spoilage and loss: the “angel’s share” in distilling and dumped batches in brewing, both of which affect your cost of goods sold

For distilleries especially, barrel-aged spirits that sit for two, five, or ten years create a unique challenge: you are carrying significant inventory value on your balance sheet for years before generating any revenue from it. We structure your books to handle long-aging inventory correctly so your tax filings reflect accurate cost of goods sold and your cash flow projections stay realistic.

What Are Keg Deposit Liabilities and Why Do They Matter?

Keg deposits are not revenue. They are liabilities on your balance sheet, and misclassifying them is one of the most common accounting errors we see in brewery financials. When a bar or restaurant pays you a deposit on a keg, that money belongs to them until the keg is returned or the deposit is forfeited. Recording it as income inflates your revenue, increases your tax liability, and creates a mess when kegs come back months later.

We set up a dedicated keg deposit liability account in your chart of accounts and reconcile outstanding deposits against your keg tracking system. When deposits are forfeited (the keg is never returned), we properly recognize that as income in the correct period. This keeps your tax preparation accurate and prevents you from overpaying.

Brewery and Distillery Tax Mistakes We Fix

After 30+ years of working with Dallas business owners, we have seen the same costly errors repeated across craft beverage producers. Here are the ones we fix most often:

• Claiming the wrong excise tax tier: Producers who do not track removals precisely sometimes pay the standard rate when they qualify for the reduced rate, or they underpay and face TTB penalties during an audit.
• Failing to separate taproom and distribution accounting: Lumping all revenue together makes it impossible to identify which side of the business is profitable and leads to inaccurate cost of goods sold calculations.
• Recording keg deposits as revenue: This overstates income and creates a tax bill on money you may have to refund. We reclassify these correctly and amend prior returns when needed.
• Missing the Texas franchise tax filing: Every Texas LLC or corporation must file a franchise tax report and Public Information Report annually with the Texas Comptroller, even if you owe zero tax. Missing this deadline can result in forfeiture of your business charter. Our franchise tax filing service runs $250 to $500 and keeps you compliant.
• Undervaluing aging inventory: Distilleries that do not properly capitalize barrel-aging costs end up with understated inventory and overstated expenses, which can trigger IRS scrutiny.

How We Work with Dallas Brewery and Distillery Owners

We provide monthly bookkeeping ($300 to $600 per month), annual business tax preparation ($1,000 to $2,000 for S-Corps and partnerships), Texas sales tax compliance, and tax planning specifically structured around production-based businesses. If you need to form a new entity for a taproom expansion or second location, our LLC formation service is $350 plus the $300 state filing fee.

Al handles every client personally. You will never be passed to a junior associate. That means the CPA who reviews your excise tax calculations is the same person who files your return and answers your phone calls year-round.

Ready to talk? Call (972) 893-3481 or book your free consultation to see how we can help your brewery or distillery keep more of what it earns.