New York Beverage Credits To Include Wine, Hard Cider

New York Beverage Credits To Include Wine, Hard Cider

New York Governor Andrew M. Cuomo recently announced wine, hard cider, and spirits are now covered under the Beer Production Credit. The credit, now referred to as the Alcohol Production Credit, is expected to save wineries, distillers, and cideries an additional $4 million over the next two years, allowing them to reinvest in their businesses.


“New York is the epicenter of a burgeoning craft beverage industry and this administration has worked hard to cut red tape and lower costs to help encourage further growth,” Cuomo said. “These actions continue our efforts and will help wineries, cideries, and distillers in every corner of the state reinvest in their businesses and create jobs and economic activity.”

The credit is available annually to craft beverage businesses producing 60-million gallons or less of beer or cider, 20-million gallons or less of wine, and 800,000-gallons or less of liquor in New York State. The expansion is effective for the 2016 tax year. It was included in the 2016-17 Enacted State Budget, and builds on the Beer Production Credit, which was launched in 2012. To date, the Beer Production Tax Credit has saved New York’s breweries $11 million.
“By expanding this valuable tax credit, Governor Cuomo is providing the craft beverage industry with yet more support for their beer, cider, wine, and spirits production, aiding in their commercial success,” said Jerry Boone, New York State Commissioner of Taxation and Finance. “These brewers, vintners and distillers will now have more money in their pockets to grow their operations and continue to provide the artisanal beverages their consumers have come to enjoy.”

In addition to the production credit, the previous sales tax exemption for tastings at breweries, cideries, wineries, and distilleries is expanded to include the alcoholic beverage tax that the producers would owe. This provision, which is effective immediately, was also included in the 2016-17 State Budget.

“This initiative is yet another example of how Governor Cuomo is using ‘entrepreneurial government’ to help the entrepreneurs in the New York grape and wine industry, which already generates more than $5 billion annually to the state economy,” said Jim Tresize, Wine & Grape Foundation President. “This tax credit will save wineries money that they can invest in their businesses and create new jobs. We greatly appreciate this support.”

If a cidery hosts tastings at its facility where the hard cider that it produces is also offered for sale, the cidery would not owe any taxes on the hard cider served at the tastings, as well as the bottles, caps, and labels used to package the beverage.

“The Alcohol Beverage Production Credit promises to spur an increase in scale and quality of cider production throughout the state,” Jenn Smith, New York Cider Association Executive Director, said. “Additionally, by eliminating taxes on tastings held where cider is made and sold, the governor has made direct interaction between producers and the public at cidery tasting rooms that much more appealing.”

Governor Cuomo’s support of the industry – through aggressive reform of antiquated laws, new marketing efforts and incentives, and reduction of red tape —has seen the industry grow 169%, across wine, beer, spirits, and cider producers statewide, since 2011.

On Oct. 17, 2013, Governor Cuomo signed the Farm Cidery Bill, which made a new license available to farm cideries that use crops grown exclusively in New York. The law has already led to the creation of eight farm cideries across the state and hard cider is now also being produced at farm wineries and breweries. Since 2011, the number of hard cider producers have increased by 480%, from five cideries in 2011 to 29 today.

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Barry Clark says:

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.