Assemblywoman Russell passes legislation to provide tax relief to small breweries, allow farms to brew locally made beer

June 18, 2012
Assemblywoman Addie J Russell (D-Theresa) announced the Assembly passed legislation providing tax relief to small breweries and allowing farms to grow, brew and sell locally made beer. Both measures are expected to become law.

“New York’s breweries are well on their way to becoming national and even international leaders in producing delicious craft beer,” Assemblywoman Russell said. “Their rise means more jobs and tourists in the North Country. The Assembly is doing its part to boost small breweries so they can continue to grow and thrive.”

Providing tax and fee relief for small breweries

Due to legal action brought by out-of-state brewers, a vital tax exemption for New York’s small breweries was ruled improper by a court in March. To fix this job-killing decision, the Assembly passed legislation providing tax and fee relief to small breweries in a way that will pass constitutional muster (A.10695).

Specifically, the bill provides a tax credit or refund of 14 cents per gallon for New York brewers on the first 500,000 gallons produced within the state, and another 4.5 cents-per-gallon credit for the next 15.5 million gallons. Brewers that produce in excess of 60 million gallons annually would not be eligible for this credit.

The legislation also provides an exemption from the labeling fees imposed on batches of less than 1,500 barrels.

“Small breweries are small businesses, and New York has a responsibility to make sure they receive the tax relief they once relied on – so that they can continue production and create jobs,” Assemblywoman Russell said.

Helping create farm breweries

The Assembly also passed a farm brewery bill that allows farms to sell their beer and/or cider to any New York State-licensed wholesaler or retailer, as well as permit the sale of New York State-labeled beer and cider for consumption on and off the premises (A.10694). The bill also allows farm breweries to sell their product, for consumption off the premises, at state fairs, county fairs and farmers markets.

“The farm brewery bill is great news for North Country farms,” Assemblywoman Russell said. “It will allow farm breweries to open and create a new market for beer and cider enthusiasts. It would also give farmers the chance to capitalize on a crop that once reigned supreme in New York: hops. Just as New York has seen success with the wine industry, farm breweries will now be able to brew beer and tap into a whole new industry that is bound to be just as lucrative as our wineries.”

Additionally, the bill will allow farm brewery licensees to manufacture, bottle and sell food products and condiments, as well as store and sell other items, such as non-alcoholic beverages, food items, beer supplies and accessories, beer-making equipment and souvenirs.

Beer and cider tastings would also be permitted under the bill and would be run similarly to the current wine tastings offered by local wineries, Assemblywoman Russell noted.

“We are helping create a whole new market for North Country farms,” Assemblywoman Russell said. “This bill will not only boost tourism revenue throughout New York, but it will also keep our farms – the backbone of the North Country’s agricultural industry – viable.”

In order to qualify for the farm brewery license, farms must manufacture, store, and sell New York State-labeled beer and/or cider, and have an annual production capacity of 60,000 barrels or less. To be considered New York State-labeled beer or cider, the products must be made from New York State-grown ingredients or apples, respectively, which will further boost farm sales, Assemblywoman Russell said.

Third-party sales tax reporting for wineries and distilleries

Earlier this year, the Assembly passed a bill that would exclude those operating under a farm winery license or a farm distillery license issued by the State Liquor Authority from the obligation to file the otherwise-required annual information return with the Department of Taxation and Finance (A.9523). This provision was also extended to farm breweries under A.10694.

“The burden imposed on these small businesses by this filing requirement far outweighs any benefits – it is just more red tape that curbs the profits of local wineries and distilleries. It is our responsibility as legislators to make sure the economical environment for small businesses is a favorable one,” Assemblywoman Russell said.