NYS Alcoholic Beverage Production Credit

Monday, April 4, 2016

As you may know, the New York State Legislature passed the State's 2016-2017 budget bill last week. While provisions pertaining to minimum wage and Paid Family Leave dominated the headlines, the adopted legislation provides a much needed update to the State's Tax Law pertaining to credits against the excise taxes imposed on the production of alcoholic beverages. Under the enacted legislation, tax credits previously only available for the production of beer have been extended to apply to beer, cider, wine and liquor. For the fiscal year commencing January 1, 2016, producers of less than sixty million gallons of beer or cider, less than twenty million gallons of wine, and less than eight hundred thousand gallons of liquor, are now eligible for the production credit.

In addition, the adopted legislation includes new provisions stating that alcoholic beverages furnished at no charge to a customer or prospective customers at a tasting are exempt from the excise tax.

Why is this relevant now? The adopted legislation amends portions of the State Tax Law to extend to all alcoholic beverage producers credits previously available only to beer producers. This change, along with others made by the legislation, is expected to save alcoholic beverage producers substantial amounts of State excise taxes going forward.

How else am I affected? As a result of the legislation, alcoholic beverage producers will need to review their excise tax filings to ensure they are taking full advantage of the newly available credit. Further, alcoholic beverage producers should monitor advisories issued by the State government as they will provide additional clarification on the implementation of the legislation.

What should I do now? We feel it is appropriate to determine whether your operation is affected by developments resulting from the passage of the legislation. Like other recent changes to the State alcoholic beverage laws, the developments resulting from the newly adopted legislation may provide expanded opportunities for alcoholic beverage production businesses, provided certain eligibility requirements are met. Once this determination is made, you can assess whether changes to operations and/or additional licensing are needed to pursue your future plans.

If you have any questions or would like to discuss this further, please contact Zachary R. Benjamin at (315) 422-1152.

Costello, Cooney & Fearon, PLLC has provided expert and diverse legal services to Syracuse and surrounding communities for more than 100 years.