Legislation is enacted to provide corporate franchise and personal income tax credits for New York’s craft breweries, exempt small breweries from paying the annual beer label registration fee, and create a farm brewery license to promote the use of local ingredients. (TAXDAY, 2012/06/19, S.11 ) In addition, farm breweries, wineries, and distilleries are exempt from certain tax filing requirements.
Income tax credit: A credit is available against the New York corporate franchise and personal income tax for eligible beer producers. To qualify for the credit, the beer producer must produce no more than 60 million gallons of beer in New York in the taxable year. However, no credit will be allowed for any beer produced in excess of 15.5 million gallons. This provision is applicable to tax years beginning on or after January 1, 2012.
The credit amount will be 14 cents per gallon for the first 500,000 gallons and 4.5 cents for each gallon produced in excess of 500,000.
Alcoholic beverage tax provisions: A $320 annual fee is established for a farm brewery license. To be eligible, a farm brewery can manufacture only New York State-labeled beer in quantities not to exceed 60,000 barrels annually. This provision is effective January 15, 2013.
An alcoholic beverage tax exemption from the annual $150 beer label registration fee is provided for beer produced in small batches totaling 1,500 barrels of beer or less annually by both in-state and out-of-state brewers. In conjunction, an alcoholic beverage excise tax provision is repealed that provided an exemption for the first 200,000 barrels of beer that were brewed and sold in New York by in-state brewers. [CCH Note: The excise tax exemption was declared unconstitutional by the New York State Supreme Court in Shelton v. NYS Liquor Authority & NYS Department of Taxation and Finance .] These provisions are deemed to have been in full force and effect as of March 28, 2012.
Sales and use tax provision: The legislation also excludes licensed farm wineries, farm distilleries, and/or farm breweries from the New York sales tax annual information return filing requirements imposed by Tax Law §1136(i), applicable to annual returns due on and after March 20, 2012.
Ch. 107 (A.B. 9523 ), Ch. 108 (S.B. 7727 ), and Ch. 109 (S.B. 7728 ), Laws 2012, effective July 18, 2012, unless otherwise noted
