Relates to beer production and beer label tax credits

6 Co-sponsors

• Martin Malavé Dilan
• George D. Maziarz
• James L. Seward
• Daniel L. Squadron
• David J. Valesky
• Catharine Young

BILL NUMBER:S7344A

Title of bill

An act to amend the tax law, in relation to establishing the beer production and beer label tax credits

Purpose

To provide a tax credit for production of beer in the amount of 14 cents per gallon for up to the first 6,200,000 gallons and a Microbrewery Beer Label Credit.

Summary of provisions

This bill amends tax law to create a new beer production tax credit against the franchise and personal income tax of 14 cents per gallon for the production of beer in New York State by a licensed brewery or licensed tenant brewer for the first 6,200,000 gallons produced in a taxable year. It also amends the tax law to create a Beer Label Credit in the amount of one hundred and fifty dollars for each brand name or label registered with the state liquor authority for beer brewed in batches of fifteen hundred or less during the taxable year.

Justification

An unexpected and significant tax burden has recently been placed on New York State brewers following a Supreme Court ruling (Shelton v. NYS Liquor Authority & NYS Department of Taxation and Finance) that struck down an excise tax exemption contained in section 424(6) of the Tax Law for the first 200,000 barrels (6,200,000 gallons) of beer produced in New York. It also struck down an excise tax exemption for microbrewery labels created for beer produced in New York State. In order to obviate the negative economic impact of the Supreme Court ruling, a newly created Beer Production Credit and a newly created Microbrewery Beer Label Credit would allow licensed breweries and licensed tenant brewers a partial tax exemption for beer and labels produced in New York State.

Legislative history

None.

Fiscal implications

None for FYE 2012-2013 as the state fiscal plan accounts for the §424(6) tax exemption.

Effective date

Immediately.