Ryan Visits Community Beer Works to Announce Passage of Legislation to Provide Tax Relief to Small Breweries

Bill will provide tax credit to help small breweries expand and create jobs
Ryan: New York should be a leader in helping to grow craft brewery business
July 3, 2012

Buffalo – Today, July 3, 2012, New York State Assemblyman Sean Ryan visited Community Beer Works in Buffalo to announce that the Assembly has passed legislation, co-sponsored by Ryan, providing tax relief to small breweries and allowing farms to grow, brew, and sell locally made beer. Both measures have passed the Senate and are expected to become law. Standing with Ethan Cox of Community Beer Works, Ryan discussed the benefits of growing the craft brewery business in New York, and the great potential for job growth in this fast emerging industry. Community Beer Works started operations in April, and currently has seven owners, with plans to expand in the next year.

“New York’s breweries are well on their way to becoming national and even international leaders in producing delicious craft beer,” Ryan said. “Their rise means more jobs for New Yorkers when we most desperately need them. Once Community Beer Works has all their equipment up and running and they have doubled their current capacity, they will be saving around $3000 per year because of this tax credit. As they continue to expand their production, this tax credit will continue to grow and help them expand further. New York State 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 that has been on the books since 1989 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 fewer 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 keep their doors open and continue creating jobs,” Ryan said.

“I'd like to thank Sean Ryan and the NYS Assembly and Senate for so quickly crafting and passing legislation to restore tax relief to NYS breweries. The money Community Beer Works will save though this bill will facilitate our own growth and our greater mission to 'Embeer Buffalo.'"

Helping create farm breweries

Ryan also discussed the passage of 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 Sate-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 Western New York farms,” Ryan 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.

“We are helping create a whole new market for Western New York farms.” Ryan added. “This bill will not only boost tourism revenue throughout New York, but it will also keep our farms – the backbone of the state’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 fewer. 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.

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, distilleries and breweries,” Ryan said.