“Craft breweries are a significant sector in our agricultural and tourism industries, and when they do well, our economy does well. I encourage New Yorkers to sample all of what our craft brewers have to offer.” – Governor Andrew M. Cuomo
Economic Impact of NYS Breweries
2016 Legislative Agenda
1. New York City Excise Tax Relief – A1719/S6303 (Lentol/Golden) *PASSED 6/16/16 – SIGNED by the Governor 9/29/16
Authorizes a credit for beer produced within NYC by a taxpayer that is registered as a distributor under article 18 of the tax law.
2. Farm Brewery Amendment allowing the sale of NYS labeled wine, spirits and cider by the glass, and allowing Farm Winereies to sell NYS labeled beer by the glass. – S5707-A7960A (Magee, Kennedy/Ritchie) *PASSED 6/9/16 – SIGNED by the Governor 8/16
3. Use & Sales Tax exemption for breweries that sell samples of beer in their tasting rooms (Kolb/Gallivan) A8706-A/S6556A
Currently, breweries are allowed a Sales and Use Tax exemption for sampled beer they give away, we will be asking for the same privilidge that wine currently enjoys, which is a Sales and Use Tax Exemption for samples sold in tasting rooms.
Current comparison as the law is written for beer – TSB-M-15(1)S
Current law for wineries in NYS – TSB-M-14(9)S
4. Sunday Blue Law (Morelle/O’mara) A8617/S6307A *PASSED 6/14/16 will change to 10am with the ability to apply for 12 permits per year for 8am except for NYC – SIGNED by the Governor 9/7/16
Authorizes the sale of liquor on Sunday mornings by 8am on a permit system.
Recent Legislation – 2015
Use Tax Exemption
Tax and Finance Exemption
Recent Legislation – 2014
Craft Act Summary:
- The production cap for micro and farm breweries goes from 60,000 to 75,000 – (Minimums are now at 50 bbls).
- Alcohol tastings at a licensed brewery or microbrewery include only any beer manufactured by the licensee and any NYS labeled beer. No other alcohol tasting allowed.
- Alcohol tasting at a farm brewery include any NYS labeled alcohol.
- Alcohol tasting at a restaurant brewery includes any beer and wine.
- The food requirements have been lowered to “finger food” for Farm or Micro licenses. (This is very vague, but if you serve pretzels, peanuts, or anything else above and beyond, you may fulfill the requirement.)
Passing of the Small Brewers Bill:
NYS brewers producing less then 300,000 bbls. Annually, or 3% of the distributors total annual brand sales, may terminate their contract provided that the brewer pays the distributors Fair Market Value for terminating the contract – arbitration decides fair market value disputes.
Protecting a Vital Tax Benefit for New York State’s Breweries – Beer Tax Return MT-50 Rebate
Any brewery that produces 60 million or fewer gallons of beer in New York will now be eligible for a refundable tax credit applied against New York State personal income and business taxes. The credit is worth 14 cents per gallon for the first 500,000 gallons produced in New York, and 4.5 cents per gallon for the next 15 million gallons produced in the State.
These tax credits will help encourage the continued expansion of New York’s craft brewing industry, which already consists of more than 210 breweries, accounts for thousands of jobs and supports more than $3.5 billion of economic activity each year. Under a previous law, small brewers in New York received an excise tax exemption, but the legal structure of the exemption was challenged, leading to its repeal. With the new benefits signed into law today, every small brewer will fare at least as well as they did under the prior exemption.
Exempting Small Breweries from Paying Annual State Liquor Authority Fee
Breweries that produce brands of 1,500 barrels or less annually (regardless of location) are now exempt from the $150 annual brand label fee. This exemption, which is eligible to brewers in and outside of the state, will save New York breweries tens of thousands of dollars, and will help smaller breweries retain the capital they need to grow their operations and create jobs.
Creating a Farm Brewery License to Promote Growth of Craft Breweries
The legislation creates a “Farm Brewery” license that will allow craft brewers that use products grown in New York State to operate in a similar fashion to the state’s farm wineries, leading to increased demand for locally grown farm products as well as expanded economic development and tourism.
The new license allows Farm Breweries to grow in the following ways:
◦ Increasing Retail Outlets for New York Products: The law allows Farm Breweries to sell New York State labeled beer, wine, and liquor at their retail outlets. In addition, Farm Wineries and Distilleries will also be now permitted to sell New York State labeled beer and liquor for off-premises consumption, and Farm Distillers will also be now permitted to sell New York State labeled beer and wine for off-premises consumption.
◦ Allowing Farm Breweries to Open Restaurants: The new law allows the owner of a Farm Brewery to conduct tastings of and serve New York State labeled beer at any restaurants, conference centers, inns, bed and breakfasts or hotels that he or she owns on or adjacent to the Farm Brewery.
◦ Increasing Tastings: The new law allows Farm Breweries, Farm Wineries, and Farm Distilleries to conduct tastings of all New York State labeled beer, wine, and liquor at their premises.
◦ Selling Related Products: The new law allows Farm Breweries to sell beer making equipment and supplies, food complementing beer tastings, souvenir items, and additional products similar to those allowed under the Farm Winery statute.
In order to receive a Farm Brewery license, the beer must be made primarily from locally grown farm products. Until the end of 2018, at least 20% of the hops and 20% of all other ingredients must be grown or produced in New York State. From January 1, 2019 to December 31, 2023, no less than 60% of the hops and 60% of all other ingredients must be grown or produced in New York State. After January 1, 2024, no less than 90% of the hops and 90% of all other ingredients must be grown or produced in New York State. The beer manufactured under these guidelines would be designated as “New York State labeled beer.” The legislation is modeled after the 1976 “Farm Winery Act,” which spurred the growth of wine production in this state, including the creation of 249 farm wineries and tripling the number of wineries.
Exempting Small Breweries from Paying an Annual State Liquor Authority Fee:
Breweries that produce brands of 1500 barrels or less annually are exempt from the $150 annual brand label fee.
Exempting Farm Wineries, Distilleries and Breweries from Burdensome Tax Filing Requirements
Farm Wineries and Distilleries as well as Farm Breweries are now exempt from a costly and burdensome tax filing requirement. Currently, all beer, wine, and liquor wholesalers here in New York are required to report sales made to restaurants, bars, and other retailers. However, as Farm wineries, distilleries and breweries are small, often family owned operations, they have struggled to afford the costs of complying with this annual reporting. The burden imposed on them by this filing requirement outweighs the benefit received by the State Tax Department, as purchases from farm wineries, distilleries, and breweries account for a very small percentage of the state’s total beer and wine sales. These businesses are already required by law to maintain sales records which the Tax Department may obtain upon request, making the additional mandatory filing requirement unnecessary.