Recent Modifications To The New York State Alcoholic Beverage Control LawThursday, August 27, 2015
On August 14, 2015, Governor Andrew M. Cuomo signed three separate pieces of legislation into law modifying the New York State Alcoholic Beverage Control Law (the "ABC Law"). The legislation makes the following changes to the ABC Law: (a) Permitting operators of Farm Distilleries to sell gifts, food items, craft products and souvenirs from their tax-paid areas (Bill No. S.4800/A.7001); (b) Authorizing alcoholic beverage tastings at retail stores without the presence of a manufacturer (Bill No. S.5333-A/A.8043); and (c) Exempting MicroBreweries from certain tax filing requirements (Bill No. S.4282/A.7106).
Why is this relevant now? The August 2015 legislation lifts significant burdens on the owners and operators of alcoholic beverage manufacturing businesses located in New York State.
(A) Bill No. S.4800/A.7001 permits Farm Distillery operators to expand the scope of their retail activities by allowing them to include sales of non-alcoholic goods within their tax-paid facilities. This modifications brings the activities permitted under ABC Law Section 61 (pertaining to permitted activities for holders of Farm Distillery Class liquor licenses) more in-line with activities currently permitted for holders of other farm-class liquor licenses (i.e., Farm Wineries, Farm Breweries and Farm Cideries). It should be noted that while the modification now permits Farm Distilleries to sell liquor making equipment and supplies.Despite this change, Federal law may prohibit ownership of such equipment without appropriate licenses.
(B) Bill No. S.5333-A/A.8043 permits holders of Alcoholic Beverage Control Retail Liquor Licenses to conduct tastings of beer, wine and cider on-premises and without the presence of a manufacturer. As a result of this legislation, bar and restaurant owners are now permitted to conduct tastings much like those conducted by manufacturers at their tasting rooms.The legislation is silent, however, on whether fees may be charged for such tastings.
(C) Bill No. S.4282/A.7106 amends Section 1136 of the New York State Tax Law to include holders of Micro-Brewery Class liquor licenses in the category of operators exempt from filing an annual information sales tax return with the State Department of Taxation and Finance. It should be noted that holders of farm-class liquor licenses are already exempt from this requirement.
How else am I affected? As a result of the enactment of the new legislation, holders of both manufacturer/wholesaler class licenses and retail licenses must determine whether changes to their present operating methods are required. Further, holders of farm-class manufacturer/wholesaler class liquor licenses must determine whether they should seek out a separate retail class liquor license in order to compete with bars and restaurants that are now permitted to conduct alcoholic beverage tastings.
What should I do now? We feel it is appropriate to determine whether your operation is affected by the new legislation. Like other recent changes to the ABC Law, the new legislation may provide expanded opportunities for alcoholic beverage business, provided compliance 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.