The CHEERS Act of 2026 allows restaurants and bars to depreciate qualified energy-efficient draft alcohol dispensing equipment over 15 years for tax purposes.
Darin LaHood
Representative
IL-16
The CHEERS Act of 2026 creates a new tax incentive for hospitality businesses by classifying energy-efficient draft alcohol dispensing equipment as 15-year property for depreciation purposes. This allows restaurants and bars to recover the cost of installing qualifying stainless steel or aluminum draft systems more quickly. The provision aims to encourage upgrades to energy-efficient equipment in the alcohol service industry.
CHEERS Act Offers 15-Year Tax Break for Energy-Efficient Draft Systems Starting in 2026
The CHEERS Act of 2026 is a targeted tax update designed to put more cash back into the pockets of bar and restaurant owners who invest in modern, energy-efficient keg and tap systems. By amending Section 168 of the Internal Revenue Code, the bill reclassifies 'qualified energy-efficient draft alcohol property' as 15-year property for depreciation purposes. This means that instead of writing off the cost of expensive stainless steel or aluminum tap equipment over a longer, more traditional schedule, businesses can front-load those tax benefits over a shorter 15-year window. This change applies to any qualifying equipment placed into service after December 31, 2025.
Tapping Into Savings
For your local neighborhood pub or a mid-sized entertainment venue, this bill changes the math on upgrading behind the bar. To qualify for the faster depreciation, the equipment must be primarily for business use, located in the U.S., and made of stainless steel or aluminum. Think of a small brewery owner looking to replace old, inefficient cooling lines and keg setups; under this bill, they get a clearer, faster path to recovering that investment through tax deductions. It’s a move that treats beer taps and kegs more like specialized machinery and less like generic building improvements.
The Fine Print on Efficiency
While the bill is a win for the hospitality sector, there is some 'Medium' level vagueness regarding what exactly counts as 'energy-efficient' or 'related commercial tap equipment.' The Treasury Department is tasked with writing the specific rules to define these terms. For a restaurant manager, this means the actual impact depends on whether the IRS takes a broad or narrow view of what 'related equipment' includes—does it cover just the tap handle, or the entire refrigerated line system? The bill also specifically requires the Treasury to create rules for businesses that lease their equipment, ensuring that even those who don't buy their kegs outright might see some of the economic benefits passed down from leasing companies.