A new bill, providing a tax credit for craft brewers in New York City, has been signed into law by Governor Andrew Cuomo.
Introduced by Assemblymember Joseph Lentol and State Senator Marty Golden in their respective houses, the bill provides the credit to craft brewers that are registered as distributors and produce 60 million or fewer gallons of beer in the state per year.
For every gallon of beer produced, up to 500,000 gallons, the craft brewer will receive a 12 cent tax credit, according to Lentol. For every gallon after 500,000 gallons the credit is nearly four cents per gallon.
“I am certain that the tax credit we provided for the craft brewers in 2012 is what fueled the industry’s growth in New York State,” said Lentol. “In North Brooklyn alone, we have some great craft brewers from Greenpoint Beer & Ale Co. and Brooklyn Brewery to Keg & Lantern Brewing Company. I am certain that this tax credit will catapult New York City’s craft brewers to the next level.”
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Like other states, New York imposes an excise tax on booze sold in the state. It had an exemption for NY beer brewers, which was ruled unconstitutional. Cuomo then restructured it as a “beer production credit” for NY brewers, to make an end run around the Commerce Clause. He recently expanded the credit to other types of NY booze. Effectively, the excise tax pays for the credit given to NY booze producers.
For example, NY imposes an excise tax on hard cider sold in the state. NY hard cider makers now get an alcohol beverage production credit. The tax and credit do not apply for apple juice and non-alcoholic cider.
Cuomo has erected a trade barrier on booze imports from other states and countries. His production credit also serves as a booze export subsidy. He has tilted the playing field to favor NY booze makers. Cuomo made his priorities clear at his alcohol summit meeting in Albany: “Is there a connection between my governorship and people drinking more? I don’t know. But, if they’re drinking more New York product, great — I’m happy.”
Similarly, New York City imposes an excise tax on booze sold in the city. Cuomo recently signed a law establishing a city beer production credit for NYC beer brewers. This credit is in addition to the state credit. Effectively, the city excise tax pays for the city credit given to NYC beer brewers.