Following this week’s announcement that US Steel workers voted in favor of strike approval, ArcelorMittal steelworkers across the region have mobilized in preparation for a strike authorization vote of their own. The vote will take place next week on Monday.

Members will meet with USW leaders at the meetings, where they will receive updates on the expected bargaining process, a rundown on strike rules, review benefits afforded to members during a strike, and, if deemed necessary, pursue strike authorization. A recently released update included the statement, “If significant progress is not made by early next week, we will return home to deliver detailed reports at membership meetings and seek your support for a strike authorization.”

If the strike is approved, the United Steel Workers Union members at ArcelorMittal locations throughout the United States could join US Steel steelworkers in a complete work stoppage in the event contract negotiations fall apart. USW officials and steel companies have been in contract negotiations for months leading up to the workers’ September 1st contract expiration date.

ArcelorMittal Steelworkers Unsatisfied With Proposed Terms

ArcelorMittal has earned the ire of steelworkers, who have not received a pay raise in three years, for proposing concessions that include hits to supplemental unemployment, incentive, vacation pay, hot-rolled steel bonuses, and health care. Union representatives communicated that these concessions could result in as much as an additional $8,000 per year in out-of-pocket health costs for the affected families.

a picture of steel rods like those produced by ArcelorMittal Steelworkers.

US Steel released its update on Wednesday of this week, saying, “We have submitted a revised proposal to USW leadership that reflects the ongoing dialogue during our most recent round of negotiations. The revised six-year proposal, which we strongly believe is in the best long-term interest of all U.S. Steel stakeholders, includes a 14% base wage increase over the term of the agreement, guaranteed profit sharing, and healthcare premiums offset with transition payments.”

Currently, U.S. Steel, ArcelorMittal, and workers are operating under contract extensions.

About Encompass Solutions

Encompass Solutions, Inc. is an ERP consulting firm, NetSuite Solution Provider, and Epicor Platinum Partner that offers professional services in business consulting, project management, and software implementation. Whether undertaking full-scale implementation, integration, and renovation of existing systems or addressing emerging challenges in corporate and operational growth, Encompass provides a specialized approach to every client’s needs. As experts in identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of the Industry.


Last week, the United Steelworkers Union (USW) voted overwhelmingly to authorize a strike if new contract negotiations can’t reach a compromise. The USW will meet in Pittsburgh to address steelmakers’ substantial profits in the face of worker wages remaining stagnant. Locals including Gary Works, East Chicago Tin, and the Midwest Plant in Portage are among the largest involved and all voted unanimously to strike. The proposed work stoppage will affect nearly 16,000 workers at locations including Clairton Works (Pennsylvania), East Chicago Tin (Indiana), Fairfield (Alabama), Fairfield Southern (Alabama), Fairless Hills (Pennsylvania), Gary Works (Indiana), Granite City Works (Illinois), Great Lakes Works (Michigan), Keetac (Minnesota), Lone Star Tubular (Texas), Lorain Tubular (Ohio), Midwest Plant (Indiana), Minntac (Minnesota), and Mon Valley Works (Pennsylvania). If enacted, the strike will be the largest such stoppage in the US steel industry in more than 30 years.

The whole situation is rooted in a decision made three years ago, when U.S. Steel was on the verge of bankruptcy. Workers conceded to a wage freeze and reduced work hours in the hopes that the company would rebound from dire straits. In short, it did. U.S. Steel is now expecting profits to exceed $2bn, the highest in 10 years.

According to a union spokesperson, “Angry USW members conducted strike authorization meetings at each U.S. Steel local over the past week.”

United Steelworkers’ Unrest  

Among the chief complaints from steelworkers is having undergone three years of work without pay increases, which comes at a time when US Steelmakers are reaping significant gains. For perspective, hot-rolled coil steel is currently selling for $900 a ton, according to the metal pricing website SteelBenchmarker. To put that into perspective, steel prices have more than doubled from the low of $412 on Dec. 14, 2015. Roughly the same three-year period in which workers state they have not experienced a pay increase.

To add insult to injury, USW claims that CEO David Burritt and U.S. Steel upper-management have endowed themselves with more than $40 million in compensation since 2015.

Proposed Changes To United Steel Workers’ Contracts

After three years with no pay increases, the USW is coming to the negotiating table seeking raises. However, the Pittsburgh-based steelmaker is looking for concessions that include more out-of-pocket health care costs, reduced retiree benefits, and a commitment to no raises in the latter half of a proposed six-year contract.

According to US Steel, the contract includes a $4,000 signing bonus, at least $6,000 in profit-sharing, and wage increases over the first 3 years of the 6-year contract. On top of the proposed terms, US Steel says that employees will gain $0.15 per hour towards their 401(k) retirement plans.

A picture of a steel production plant Like those where US Steel workers are considering organizing a strike.

According to a statement issued by the USW, “Our committee will be returning to Pittsburgh next week to resume negotiations with U.S. Steel management to reach an honest and fair settlement. As you know, management’s proposals so far have been completely unacceptable, particularly in light of the company’s projected profit this year of nearly $2 billion. We will be sure to keep all members informed of any progress we make at the table next week and of whatever next steps we anticipate.”

Consequences Of A United Steelworkers Strike

The consequences of a USW strike, at least on the US manufacturer, will depend on the size and scale of operations and whether or not a manufacturer has a stockpile of materials to work with. Make-to-order manufacturers will be at the highest risk of disruption and may find fulfillment increasingly difficult if the supply of raw materials is cut abruptly. when it comes to manufacturers who are not a level-one priority for raw steel, the result is having to choose to cut production or pay the import fees on steel from outside the US and pass the cost on to their customers. If the latter is the case, those manufacturers run the risk of losing customers as a result of higher prices for their manufactured goods. On the customer-facing end, higher steel prices may be on the horizon.

US Steel And The United Steelworkers Strike Of 1986

U.S. Steel was involved in a strike/lockout situation more than 30 years ago in 1986. During this work stoppage, about 22,000 steelworkers brought about the longest steel industry work stoppage in US history. The strike/lockout lasted from August 1, 1986, to January 31, 1987.

The effects included disrupting deliveries and expensive and unplanned plant-idling operations. To continue running at a diminished capacity, management-level employees began loading trucks and trains with previously-produced steel kept in inventory themselves and shipping it to customers. The result was violent clashes between management with striking workers.

USW Facts

USW forms the largest industrial labor union in North America with 860,294 members. Their current rate of dues is equal to 1.45% of total earnings, plus $.02 per hour.  This tops out at a maximum of 2.8 the average steelworker’s hourly rate, plus $.02 per hour. Minimum dues are $5.00 per month.

Relevant US Steel, US Steel Steelworkers, And USW Union Salary Information

US Steel Corp executive salaries

US Steel Corp 2018 Proxy Statement 

USW staff wages

• US Steel employee salary data according to Glassdoor, Indeed, and Payscale.

• Average structural iron and Steelworkers salary according to the US Bureau of Labor Statistics.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


The South Dakota versus Wayfair, Inc. Supreme Court ruling has had a significant impact on businesses all over the United States. The decision effectively overturned a longstanding physical presence rule (Quill Corp. v. North Dakota) for determining when a state can make remote sellers collect sales tax.

The Supreme Court ruled on July 21, 2018, and, as a result, South Dakota is granted authority to impose sales tax obligations on out-of-state transactions.

 

a picture of a gavel on a pile of money as the SCOTUS has ruled on South Dakota v. Wayfair, Inc.

South Dakota v. Wayfair, Inc. will have far-reaching implications for businesses operating remotely throughout the United States.

 

In short, sales tax makes up more than 40% of South Dakota’s revenue. The Supreme Court judged it to be unfair that e-commerce and remote sales should be able to avoid the sales tax that can generate as much as $14bn for states annually.

The ruling aims to level the playing field between non-collecting e-commerce and remote sellers and brick-and-mortar businesses.

Overturning Quill Corp. v. North Dakota

The decision of this 1992 ruling effectively prevented states from collecting any sales tax from retail purchases made over the Internet or other e-Commerce routes, unless the seller had a physical presence in the state. Due to the rapid expansion and increased prevalence of e-commerce and remote sellers, the decision to exempt these businesses from paying sales tax no longer made sense and worked to the detriment of states in which those businesses conduct sales.

“Because the physical presence of Quill is unsound and incorrect, Quill Corp. v. North Dakota, 504 U.S. 298, and National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753, are overturned.” SOUTH DAKOTA VS. WAYFAIR, INC., ET AL. NO. 17-494. ARGUED APRIL 17, 2018 – DECIDED JUNE 21, 2018

Who Is Affected By The South Dakota v. Wayfair, Inc. Ruling

The recent decision directly affects several nationwide sellers. In particular, the decision affects remote sellers not currently registered with the state who meet threshold requirements. Those threshold requirements are:

  • Annual sales over $100,000 or 200 transactions into South Dakota

The ruling does not affect any business already registered and collecting sales tax in South Dakota. Those businesses will be grandfathered in under the new ruling.

It is important to understand that this ruling applies to both online and offline sales. Anyone conducting cross-border sales with South Dakota is bound by the new ruling.

The ruling does not change what is or is not taxable, either. Rather, it is establishing that a physical presence is no longer the criteria by which the state decides who collects sales tax. Services, not just tangible goods and personal property, fall under the new rule. This ruling will apply to manufacturers and wholesalers who sell direct to consumers, too.

Exemption certificates will be available for those businesses selling business to business (B2B).

South Dakota v. Wayfair, Inc. Setting Precedent and Economic Nexus

To begin, understanding the definition of economic nexus will help businesses realize what this ruling does in terms of setting precedents for other states that choose to implement the same requirements.

an infographic map showing economic nexus states following the South Dakota v. Wayfair, Inc. ruling

Infographic provided by tax compliance experts, Avalara.

Economic Nexus is a tax collection obligation imposed on sellers based on their level of economic activity within a state. Unlike physical presence, it is based entirely on sales revenue, transaction volume, or both.

These rules vary from state to state. With the recent ruling setting a threshold in South Dakota, it will likely lead other states to utilize the precedent and use the same threshold at a minimum.

What You Can Do

First, don’t panic. Contact your SALT CPA or attorney tax advisor and seek counsel on all nexus-related requirements and law. If you don’t have one, our partners at Avalara are among the best when it comes to tax compliance and they have an extensive directory of tax experts and SALT CPAs who can work with you to get things in order.

You can leverage Avalara Tax Advisory Services (TAS) to:

  • Determine where you have nexus
  • Get ongoing monitoring services to see when new nexus is established
  • Register in new jurisdictions
  • Navigate tasks related to establishing new nexus

For an easy reference, download this 2018 Mid-Year Sales Tax Changes whitepaper from Avalara. Inside, you’ll find many details surrounding recent tax changes that could directly affect your business as well as how you can address the best approach to resolve any identified issues.

About Avalara

Experts in all things revolving around tax compliance Avalara makes tax compliance easy and efficient, enabling you to do what you do best without constantly worrying about rate changes or filing deadlines.

About Encompass Solutions

Encompass Solutions, Inc. is an ERP consulting firm and Epicor Platinum Partner that offers professional services in business consulting, project management, and software implementation. Whether undertaking full-scale implementation, integration, and renovation of existing systems or addressing emerging challenges in corporate and operational growth, Encompass provides a specialized approach to every client’s needs. As experts in identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of the Industry.


Metal Tariffs

New metal tariffs on foreign materials are likely going to affect industries that employ millions of Americans. Beverage and robotics manufacturing are just two of the affected industries, but these two will be among the segment most heavily affected by the new tariffs on imported building materials. The metal tariffs recommended by the U.S. Commerce Department apply to aluminum and steel imported to the US from abroad. The tariffs reach as high as 53%, which could pose a big problem for industries relying on these essential metals for manufacturing purposes.

an image of a port where metal tariffs will likely have a massive impact.

New tariffs on foreign materials are likely going to affect industries that employ millions of Americans.

The proposed metal tariffs were submitted by Commerce Secretary Wilbur Ross, effectively giving the president three options to choose from as per Ross’ recommendations. The first option is the broadest and most sweeping, in which Ross recommends the president impose tariffs of 24% on all steel and 7.7% on aluminum imports from all countries. The second is far more specific in whose imports are tariffed the hardest, with Ross’ recommended tariffs of 53% on steel imports from 12 countries, including China, Brazil, and Russia, and tariffs of 23.6% on aluminum imports from China, Hong Kong, Russia, Venezuela, and Vietnam. Ross has gone so far as to supplement these tariffs alongside quotas. Finally, the third option Ross has laid out will impose a quota on steel and aluminum imports from all regions, which will limit countries to 63% of the steel and 86.7% of the aluminum that each had shipped to the United States last year.

The Fear Following Metal Tariffs

While it is surmised that these metal tariffs will prompt a reinvestment into the US metals manufacturing sector, some experts believe the shift could earn the ire of many US trading partners. What if, as some economics and trade experts argue, China decides to place tariffs on US semiconductors or India on food imports from the US? Retaliation is the biggest fear according to these specialists beyond the notion that the tariffs will upset the current climate of international trade. Not to mention, most of the US metals importuning comes from valued trading partners and allies not targeted specifically by Ross’ proposed tariffs, like Canada.

US Metal Manufacturing

In the last 18 years, nearly the same number of aluminum smelters have closed their facility doors in the US. Currently, there are only two aluminum smelters running at capacity, with three others in the US operating at partial capacity. On the other hand, steel has enjoyed a bit of a bounce back. Market leaders in metals, like Alcoa and Nucor, are optimistic at the possible shit as it will likely inject US metals manufacturing with some desperately needed vigor. Share prices of US steel and aluminum smelters have surged following the announcement of the proposed tariffs. However, the rally may be premature if the president decides to explore an alternative route in addressing the undermining of domestic metals production.

Nevertheless, Alcoa has announced plans to restart a smelter in southern Indiana by mid-2018. Southeast Missouri may find one if its dormant smelters resurrected, pending negotiations of an electrical supply contract with local utility company Ameren Missouri. While the news for metals manufacturers leaves room for optimism, the state of metals manufacturing has been sorely outpaced by producers like China, which operate many modern facilities that make the processes cost effective. Without significant modernization efforts on top of the revitalization of metals manufacturing in the US, the long-term efficacy of these efforts remains to be seen.

The State Of US Robotics In The Face Of Metal Tariffs

When it comes to the robotics manufacturing industry, the US is a global leader in the field. Innovating creations in every sector from defense and medical applications to the automated manufacturing of confections, the state of robotics has never been more fruitful for the US. However, robotics is an industry that relies heavily on the supply of steel and aluminum as the two metals make up the bulk of manufacturing materials in building robots and robotic components.

The tariffs could significantly increase the costs of innovation at while production gains momentum among competitors abroad. Elsewhere in the world, US competitors in robotics will likely continue to make headway and possibly outpace the US manufacturers forced to adapt to a much different landscape when it comes to materials availability. The imposing of tariffs could additionally upset last year’s optimistic forecast that the metal fabrication robotics market is set to grow at a compound annual growth rate (CAGR) of 18.5% over the next three years.

How Brewers And Canners Are Affected By Metal Tariffs

Breweries and canned food companies are two more industries that are expected to be affected by the move, as they rely heavily on imported metals for the packaging of their products. The resulting tariffs, if accepted will not only raise the prices of canned goods but could significantly increase the cost of beer should breweries decide to abandon canning altogether and go to the bottle.

The two different packaging systems require entirely different mechanical apparatuses, which cost tens if not hundreds of thousands of dollars to implement operate and maintain for brewers. The result is a more costly six-pack, despite what the container is made of.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


Traditional honey-wine, more commonly known as mead, is fast becoming a popular drink of choice among many New Yorkers. The ancient beverage has a growing following as well as a small but dedicated contingent of manufacturers in the north-eastern state. Governor Andrew Cuomo has recently proposed an allowance for mead producers to take advantage of an NY state farm beverage license. The provision allows these beverage manufacturers to enjoy the same benefits afforded to wineries, breweries, and distilleries, which have experienced a significant economic boom because of their commitment to using New York-sourced ingredients.

A picture of several carboys filled with mead.

Traditional honey-wine, more commonly known as mead, is fast becoming a popular drink of choice among many New Yorkers.

As a result of the new farm beverage license, Mead producers will be allowed to erect restaurants and gift shops, provide tastings, by-the-glass sales onsite, and other retail endeavors. Craft alcohol has enjoyed a significant surge in economic prosperity following legislation passed this year that provided significant cuts for the nation’s small-scale alcoholic beverage manufacturers. The tax breaks will remain in effect over the next two years and provide up-and-coming breweries, wineries, and distilleries with some much-needed cash flow to support their operations. New York alone has a reported 435 wineries, 400 breweries, 150 distilleries, and 65 hard cider makers. Currently, there are about 12 mead-makers in the state that commands a top-5 spot in each beverage category. NY ranks first in the nation among hard cider makers. The escalation in manufacturing operations is directly attributed to the farm licenses provided by the state. These certifications emerged in 1976 with the farm winery license, with the farm distillery license and farm brewery license emerging in 2007 and 2012, respectively.

The farm meadery license will, as the name suggests, apply to standalone makers of the honey-based beverage that ranges between 10 and 12 percent abv. Like wine, the process of mead-making involves the incorporation of produce, such as fruits, herbs, flowers, and spices to enhance flavors. A similar brew, known as braggot, could fall under the same category, though its recipe’s inclusion of honey and barley malt brings it closer to a beer-style beverage with a 5 to 6 percent alcohol content. Meaderies would also gain the benefit of open sale in wine stores, liquor stores, and grocery stores.

Farm Beverage License And NY Mead Manufacturers

Honey. As the North East’s top producer of the sweet and sticky substance, NY is positioned to be a significant hub for mead-making activity. Beyond honey production, NY is among the top three states in the US producing apples and grapes.

A closeup of honeycomb uesd in mead, which enjoys several benefits under the NY farm beverage license.

Honey Is The Essential Ingredient When It Comes To Fermenting Mead And Enjoys Many Benefits Under The New NY Farm Beverage License.

As it stands, the new license would only apply to mead manufacturers producing less than 250,000 gallons per year and come at a cost of $75 per year. To put that number into perspective, a commercial wine license is priced at $3,025 per year. The benefits are significant and many hope the incentives will motivate mead manufacturers to ramp up production and new meaderies to put down roots in the state.

With costs low and the landscape ripe for expansion beverage manufactures, New York is a prime location to set up shop or branch out for existing operations. The state’s economic impact from breweries alone totaled more than $3.5bn in 2017. Grants exist for commercial beverage makers as well, with $250,000 allotted to each segment for use in advertising and targeted marketing campaigns. New York State has compiled significant resources for these manufacturers, including tax-based incentives, operational support, growth support, and innovation development support funds.

How ERP Benefits Beverage Manufacturers

As business scales for many of the state’s beverage manufacturers, effective platforms to keep operations running smoothly are essential. Platforms that address quality control, recipe-based formulation, distribution, human capital management, finance, and analytics among a host of other tasks associated with running a small to medium-sized beverage manufacturing operation. Many ERP platforms have adapted to create complete solutions built specifically for wineries, breweries, and distilleries. Saving time and money, ERP software allows manufacturers to focus far more on the front end than on the repetitive and mundane tasks associated with the back office.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


Non-Alcoholic Beverage Manufacturing

Non-alcoholic beverage manufacturing is finding its niche in the brewing world. With 5% market growth for low and non-alcoholic beer brewers recorded during 2015, things are looking up for suds without the buzz.

Granted these brews don’t typically appear at your local brewpub, but wholesalers and retailers are picking up these brands to serve a population that respects the flavor but doesn’t want a more holistic approach to their consumption habits. Because alcohol is associated with a myriad of health risks, global consumption of traditional beer has dropped over the last few years.

A picture of several vats in a brewery where Non-Alcoholic Beverage Manufacturing takes place.

Craft Brewers Are Increasingly Looking At Alcohol-Free Beer As An Additional Revenue Source.

Even major breweries are jumping on the bandwagon, with both AB InBev and Corona calculating that by 2025 their production of non-alcoholic beers will make up 20% of overall production. Heineken has reported the alcohol-free market has grown by 9% YoY. Spanish and German counterparts reporting that the market in their regions reveal much the same, with a respective 33% and 23% of the populations affirming they go alcohol-free on occasion.

Big Benefits Of Non-Alcoholic Beverage Manufacturing

Beyond the health benefits that many consumers swear by, non-alcoholic beverage manufacturing is proven to generate big revenues from one simple perk: No Sin taxes. Because non-alcoholic beverages don’t contain any alcohol, they aren’t subject the taxes associated with alcoholic beverages. On average these brewers generate 1.5x the revenue when compared to their counterparts at scale.

Beyond monetary incentives, the same draw that craft brew has had on a global audience applies just as aptly to non-alcoholic beverages. Hops and natural ingredients offer an extensive palate through which drinkers can experience the possibilities of alcohol-free drinks.

Systems Supporting Brewers

In terms of process, the brewing of alcohol-free beer is very similar to brews with booze. Ingredients, cook times, sterilization, storage, bottling, distribution, and order fulfillment are all part of the equation. Just about every item a brewery looks at can be applied to both, except that pesky Sin Tax. A robust solution to ensure that these breweries have less to worry about on the back-end will ensure they are able to control the quality of their product on the front-end. With tailor-made solutions for just such enterprises, ERP software is increasingly becoming a staple of the brewing process.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


Virginia Wine And Beer Makers Unnerved By Spotted Lanternfly

Virginia wine and beer manufacturers are exceptionally anxious following the recent discovery of an invasive species in Virginia that could potentially threaten hops and grape growing operations throughout the state.

The spotted lanternfly, a sap-eating insect like the large Aphid, first appeared in Virginia early last month. Native to Asia and notoriously good at stowing away. It is suspected the potential nuisance arrived on a shipment of construction materials from China. In recent years the bug has been spotted in Pennsylvania and Delaware, which hasn’t done much to allay fears that the population is growing in number and reach.

Grape growers are expected to be hit the hardest as a result. The problem arises when the bugs find a sweet and sappy meal, much like ripe grapes. When they set down to dine for a meal, they leave behind a substance similar to honeydew. This substance is the main culprit in the development of sooty mold, a fungus which will break down the fruit and cause it to go foul in the process.

The first reports of the bug surfaced in Pennsylvania in 2015 and Agricultural officials in the region have been keeping a close eye on the visitor ever since. It still remains to be seen just how much the population has spread in that time. The authorities in Pennsylvania, Delaware, and now Virginia are all working to create a containment plan before things can get out of hand. $17.5 million has already been allotted to the efforts in emergency funding for Southeast Pennsylvania.

Not much is known about the spotted lanternfly in the US, it’s full impact on plant species or any natural predators. an entomologist at the University of Maryland, Mike Raupp expects the USDA has likely sent experts to Asia for a more comprehensive investigation on the details of the bug’s background and impact on local ecosystems.

Authorities in all three states are urging anyone who suspects a presence of the insect to report it to authorities immediately. Tree of Heaven trees appear to be particularly attractive to the spotted lanternfly and growers with these trees on their property may want to reconsider maintaining their presence on-premises.

The Economic Impact For Virginia Wine And Beer

In Virginia, the wine and wine grape industry is one that brings in considerable revenues. In 2015 the state’s winemakers produced 705,000 cases or just under 8.5 million bottles. In total, the full economic impact of wine and wine grapes on the Virginia economy reached $1.37 billion. With just under 10,000 Virginians employed in local wine-related industries and wine-related tourism contributing a significant amount to those revenues, an outbreak of sooty mold as a result of the spotted lanternfly’s presence would pose a significant threat to the state and local residents.

With nearly 200 craft breweries in the state, hops could soon become a hot commodity. Also susceptible to the sooty mold these bugs produce, hops are a main ingredient contributing to the nearly $10 billion that Virginia’s economy enjoys from brewing activities and beer related tourism. Not to mention the 20,000 people the industry employs statewide.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


For those unfamiliar with the Craft Beverage Modernization and Tax Reform Act, the recently passed tax reform applying to alcoholic beverage manufacturers, the short of it is that the legislation offers two years of heavy relief from federal excise taxes applied to one of the most severely taxed industries in the US. So, what are craft brewers, distillers, and vintners going to do with it? For most, the word is grow.

The tax breaks will translate into substantial annual savings for these craft beverage makers, between $20,000 and $100,000 to be more precise, and allow them to hire more staff, expand operations, and invest in marketing to build their brands.

Brewer Benefits

For many of the nation’s thousands of small breweries, the tax break of $3.50, effectively halving the previous $7.00, on the first 60,000 barrels(BBL) produced for domestic breweries producing less than 2 million BBL annually, will be a desperately needed lifeline. To put things into perspective, that $7 has been anywhere from 15 percent to 25 percent of the total cost of that BBL.

a picture of two pint glasses filled with beer.

For many of the nation’s thousands of small breweries, the tax break of $3.50 effectively halves the previous $7.00.

Competing with the likes of D. G. Yuengling & Son, Inc, Sierra Nevada, New Belgium, and Boston Beer Co., mom-and-pop and Main-street brew operations have had a hard time coming up in an industry that has seen improved performance year on year but is at the same time contracting. An extra $20,000 going towards a brewpub can provide another part-time employee, new vats, advertising, and a host of other potentially powerful tools to aid expansion. Some operations will transcend the modest manufacturing operations to the regional scale and evolve into full-blown enterprises as a result. With new enterprise comes new concerns, including accounting, production, distribution, and, perhaps the most significant hurdle of even the most robust ERP solutions, tax responsibilities.

Distiller Details

The same positive outlook is true of the States’ 1,500 craft distillers who are already seeing big benefits from the change. The tax cuts bring federal excise taxes for distillers down significantly from $13.50 to $2.70 per proof gallon, applying to the first 100,000 gallons per year for a two-year period. Used to its maximum benefit, the savings translates to $2.16 million. With taxes on distilled spirits among the highest in the US, reaching more than 50 percent of a product’s purchase price in many cases, the relief is more than welcome from the craft distillers of America.

a picture of two glasses of whiskey, neat.

Used to maximum benefit, the savings in taxes translate to $2.16 million annually for craft distillers.

The industry workforce has grown to 20,000 with a cumulative investment total of $600 million in the last decade alone. Compare that to Jack Daniel’s Distilleries, which blows through that 100,000-gallon tax break in one day of production, and the future is only looking brighter for the craft distillers of America.

Vintners Toast Approval

Wine is another beneficiary of the latest excise tax reform, albeit with a slightly more complicated structure. Wine is taxed based on alcohol content with new rates applied to those containing 16 percent or less of alcohol, 16 percent to 21 percent, and 21 percent to 24 percent. These categories are taxed 21-cents, 31-cents, and 62-cents per bottle respectively. The benefits are a bit easier to see with a broader view. Let’s first take the initial 30,000 gallons a winery produces. Each of these barrels receives a $1 credit per gallon. The following 100,000 gallons receive a 90-cent tax credit and a 53.5-cent credit is applied to the next 620,000 gallons. All wine produced after that is taxed at the standard rate. The new tax rates are a far cry better than those previously afforded to the small wineries of America and when used to their fullest potential can provide craft vintners more than $450,000 in tax credits.

a picture of two glasses of white wine against a sunset backdrop.

When used to their fullest potential, the tax breaks can provide craft vintners more than $450,000 in tax credits.

With the results of the tax reform already taking effect, it’s not hard to see why the craft beverage manufacturers of America are celebrating. This reduction of excise taxes will afford the burgeoning craft beverage industry considerable capacity for expansion over the next two years and we can’t wait to see where the influx of capital will take up and coming enterprises.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


Following the most recent tax reform legislation passed by the federal government, manufacturers of all sizes have enjoyed success in their sectors. This week, White House Press Secretary Sarah Sanders delivered a daily press brief that highlighted how policies outlined in the new tax law have had a positive impact on businesses. One such success story came from Pittsburg, PA’s H&K Equipment.

A picture of literature that details economics and taxes.

Recently Passed US Tax Legislation Has Had A Favorable Impact On The Nation’s Manufacturers.

H&K Equipment’s Story

The company was founded in 1983 by three entrepreneurs and run out of a garage. Today the company has grown to include 200 employees providing services in selling, renting, and servicing lift trucks, container handlers, railcar movers, personnel carriers, yard trucks, and industrial sweeping and scrubbing equipment.

According to company representatives, 2017 had been the company’s best year to date. The success has been attributed directly to the White House’s position on economic and job growth. Tax cuts, in particular, allowed the company to expense new equipment they acquired within the same year and return 50% more on investments made into the company when compared to 2016. According to Sanders, “When they buy more trucks and equipment for their rental fleet, they hire more technicians to service them, buy more service vehicles to transport those techs from customer site to customer site, and buy more parts from their suppliers to keep the rental fleet running. All of this economic activity spurred by the tax bill will result in more jobs, higher wages, and a brighter future.”

A picture of H&K Equipment Headquarters

H&K Equipment’s Success Story Is Just One Of Many Following The Recently Passed US Tax Legislation. Photo Provided By: H&K Equipment

There are currently 566,000 employed by the manufacturing industry in Pennsylvania alone, with an average annual salary of $72,500 for workers. The state generates $85.13 billion according to a 2015 report on manufacturing output. These growth- and worker-focused policies coming from the current US Administration are leading to big benefits for manufacturing outfits in Pennsylvania and across the country. Beyond mid-sized operators like H&K, conglomerates, including AT&T, Boeing, and Waste Management, have all attributed increased commerce and benefits to employees as results of tax reform. 2018 is expected to usher in further progress in US manufacturing investment, expansion, and employment.

US Manufacturing And Production Make Gains In Q4 Of 2017

2017 was a booming year for manufacturing with overall production rising for a fourth consecutive month in December. That resulted in a 2.4% increase year-over-year according to the Federal Reserve. December’s gains dripped slightly from November’s numbers, but the trend gleaned optimism from industry experts and professionals alike. The increase in production for 2017 has been the highest gain since 2014.

A picture of workers and equipment in a manufacturing facility

Manufacturers Big And Small Are Reaping The Benefits Of More Favorable Tax Laws that Facilitate Expansion In Investment And Hiring.

The report from the Federal Reserve released this month pulled data from industrial production, manufacturing, durable goods, and nondurable goods. The biggest gains came from industrial production, which jumped 1.6% from September to October, and nondurable goods, which enjoyed the lion’s share of progress in recovering 2.5% from a September low to its highest show in October.

In related news, overall industrial production was up nearly 1% in December, totaling a 3.6% rise for 2017. Peripherally, utilities and mining rose 5.6% and 1.6%, respectively.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.