Cuomo and Co. Wont Let Breweries Pour Their Money Away!

Just a quick update on an important piece of legislation moving through the New York legislature. This week Gov. Cuomo and the State Legislature have created a tax credit for New York state craft breweries, which restores an excise tax exemption that was taken away from the breweries after a ruling in a Shelton Brothers lawsuit questioning the vailidity of the exemption as well as labels fees, which small in-state breweries didn't have to pay, but out of state breweries did.

The tax credit will off set the state exemption of 12 cents per gallon, and New York City exemption of 14 cents per gallon.

While this would have been a major hit to breweries in planning such as Strong Rope, we could have at least written it into our business plans and accounted for it. But the exemption repeal took place immediately with no warning and was going to be a major hit to those breweries that were already operating with that exemption in place.

Brew York explains what that would have done for a small brewery like Barrier Brewing Co.,

Since they self-distribute to New York City instead of using a distributor, they are now personally subject to paying the state tax, and an additional New York City excise tax of $3.72 per barrel (when using a distributor, the tax is passed on to them using the “Brewery Exemption” in ABC Law). That’s $8.06 per barrelthat in-state breweries will now pay for every drop of beer they send to New York City that they didn’t before. For a brewery that last year had a capacity of about 500 barrels, that’s a tax levy of over $3,000 if just half their beer went five miles west across the city line.

So lets raise a glass to our Governor and Legislature and make sure this gets passed into law, when it comes up to vote on June 21st.

Cheers,

Jason