Legislature Approves Proposal to Exempt Farm Wineries and Craft Breweries from Burdensome Tax Filing Requirements

Pro-small business legislation originated by LaValle and Thiele would aid East End farm wineries and craft breweries
July 5, 2012
New York State Legislators Kenneth P. LaValle and Fred W. Thiele, Jr. today reported that the New York State Legislature has given final passage to legislation they have sponsored which exempts farm wineries and craft breweries from a burdensome tax filing requirement. The vote was 140-0 in the State Assembly and 55-1 in the State Senate.

Under current state law, all beer, wine, and liquor wholesalers are required to report sales made to restaurants, bars and other retailers to the New York State Department of Taxation and Finance. Farm wineries and craft breweries were included within the definition of a wholesaler required to report. The new legislation, which the Governor made part of his 2012 legislative program, would exempt farm wineries as well as craft breweries from this costly and burdensome paperwork requirement.

A farm winery license limits the holder to producing no more than 150,000 gallons annually. A farm distillery license limits the holder to producing no more than 35,000 gallons annually.

Because of their restricted size, it is difficult for farm wineries and farm distilleries to absorb the cost of complying with the annual filing requirement. Exempting them will not undermine the effectiveness of the third-party reporting legislation, because purchases from farm wineries and farm distilleries account for a very small percentage of retailers' overall purchases. Moreover, farm wineries and farm distilleries are required to maintain sales records pursuant to requirements imposed by the SLA, which the Department of Taxation and Finance may obtain upon request.

Senator LaValle stated, “Farmers need to be farming, not filing endless paperwork that stifles needed business investment and forces farmers to spend more time pushing pencils than actually farming.”

Thiele stated, “Farm wineries and craft breweries are small and mostly family operations that have struggled to comply with this needless filing requirement. The burden and cost on business far outweighs any benefit to the state. There are other ways that the State Tax Department can obtain this information. In particular, this legislation will benefit the farm winery operations on the East End. Our wineries can better use their time to growth their businesses and promote their product rather than filling out costly paperwork.”

The legislation was supported by the Long Island Farm Bureau. The legislation will now go to the Governor for signature.