State and federal lawmakers announced a two-step plan to ensure that the loss of a New York State tax credit to local craft breweries doesn’t raise the cost of craft brews served at local pubs and sold at New York stores.
Last month, the New York State Supreme Court ruled in favor of an out-of-state brewer and struck down a state excise tax exemption offered to in-state breweries that was designed to help the newly established industry expand and create jobs.
As a result of the court decision, a New York State brew pub that produces 100,000 barrels of beer a year could see a cost increase of close to $500,000.
Senator Charles Schumer is pushing for legislation that would cut in half the federal tax on small breweries, helping small brewers across New York reinvest in their business, hire new employees and keep the retail cost of New York produced beer down.
“New York’s craft brew industry is not just about good spirits, it’s about good jobs,” said Schumer.
Schumer has also been pushing an “I Love NY Brew” campaign to market New York’s growing craft brewery industry to convenience stores, restaurants, and local pubs throughout the state.
At the same time, a bipartisan group of New York lawmakers, including State Senators Lee Zeldin, Daniel Squadron and Assemblyman Joe Lentol are introducing legislation in Albany that would provide state-based tax credits for the production of New York State craft brews in order to offset the financial impact of the loss of the state excise tax exemption.
“Jobs of all kinds have been created as New York has rediscovered its beer production history,” said Lentol, whose district is home to the Brooklyn Brewery.
"The loss of the small brewer tax exemption was a big blow to the Brooklyn Brewery,” said Steve Hindy, owner of the Brooklyn Brewery. “It will cost us a half-million dollars in the next year.”
According to the New York State Brewer’s Association, in New York City, 5 breweries brewed 132,073 barrels of beer last year, and there are plans to open 5 new breweries.
In New York, the beer industry directly supports approximately 8,000 jobs through brewing and distribution, and nearly 60,000 jobs overall when retail sales are factored in. These jobs paid nearly $1.7 billion in wages in 2008, and accounted for almost $5 billion in economic activity.