Will the CHEERS Act Really Help Breweries and Restaurants? Read the Fine Print
The brewing and hospitality industries have been buzzing about the newly proposed CHEERS Act (Creating Hospitality Economic Enhancement for Restaurants and Servers Act). Touted as a win for bars, breweries, and restaurants, the bill aims to provide tax deductions for businesses that install energy-efficient draft systems or upgrade draft beer systems. It’s an exciting step toward supporting modern beverage service, especially for those that rely heavily on draft infrastructure.
What the CHEERS Act Proposes
Introduced in May 2025 (H.R.3325), the CHEERS Act amends Section 179D of the Internal Revenue Code to include certain draft beer dispensing systems—like kegs, taps, and glycol chillers—as eligible for energy-efficient commercial building property deductions.
To qualify, businesses must either install a new energy-efficient draft system or make eligible upgrades to their existing system. The equipment must:
Be depreciable property placed in service after December 31, 2024
Be installed in a U.S. building that falls within the scope of ASHRAE Standard 90.1
Contribute to reducing the building's annual energy and power costs by at least 25% compared to a baseline model
It may require third-party certification to validate those savings, aligning it with current Section 179D compliance practices.
The CHEERS Act expands the longstanding Section 179D tax deduction for energy-efficient investments, now including keg and tap systems, draft equipment upgrades, and provisions for lost or stolen keg relief. This added component helps address a real operational challenge in the industry, recognizing the costs associated with lost inventory. By reducing upfront expenses, the bill aims to make it easier for hospitality businesses to modernize their draft infrastructure and continue delivering fresh, high-quality beverages to consumers nationwide.
What This Means for Breweries and Restaurants
Breweries with taprooms and restaurants with bar service areas could see real value here. Equipment upgrades like high-efficiency glycol chillers, insulated trunk lines, and automated cleaning systems may qualify. While existing systems may need significant upgrades to meet eligibility, the bill creates a clear path forward for those planning future improvements.
The bill has gained support from industry organizations like the Brewers Association and Beer Institute, which see it as a tool to promote sustainability and economic growth in the on-premise channel.
Considerations for Small Businesses
A complete energy-efficient draft system—such as a 6-tap setup with high-efficiency cooling, trunk lines, and cleaning mechanisms—can range anywhere from $10,000 to $25,000, depending on the brand, configuration, and specific equipment selected.
When considering energy-efficient upgrades to existing draft systems, it's also helpful to understand the potential costs involved. For example:
High-efficiency glycol chillers can range from $4,000 to $10,000 depending on capacity and brand.
Insulated trunk line systems can cost between $1,500 and $5,000 depending on the length and configuration.
Automated line cleaning systems may range from $2,000 to $6,000 depending on the number of lines and complexity.
These are meaningful investments, and while the tax deduction can help offset costs, they may still be out of reach for smaller operations without financial assistance or long-term planning.
At first glance, the CHEERS Act sounds like a universal win—but it’s important to look at the practical side. Energy-efficient draft upgrades are a smart investment, but they can be expensive. For small breweries, restaurants, and hospitality venues working with tight budgets, the initial investment might feel out of reach.
The opportunity is there, but broader access may depend on additional support—like grants, financing programs, or phased-in incentives—that help smaller players participate without strain.
Final Thoughts
The CHEERS Act is a promising step toward modernizing and supporting the hospitality industry’s draft infrastructure. By expanding Section 179D to include keg systems, taps, and other related equipment, it brings attention to the value and impact of on-premise draft service.
It’s also worth noting that these draft system upgrades aren’t just for traditional beer lines. As consumer preferences evolve, we’re seeing more RTDs, CBD, and THC beverages on tap—highlighting how this legislation could benefit a wider variety of producers and venues.
With thoughtful implementation and additional support, the CHEERS Act has the potential to create long-term benefits for businesses of all sizes.
