senate Bill S7344A

Relates to beer production and beer label tax credits

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 02 / May / 2012
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 22 / May / 2012
    • AMEND (T) AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 22 / May / 2012
    • PRINT NUMBER 7344A
  • 31 / May / 2012
    • REPORTED AND COMMITTED TO FINANCE

Summary

Relates to beer production and beer label tax credits; allows a credit against tax of fourteen cents for each gallon of beer produced in the state of New York by a licensed brewery for up to six million two hundred thousand gallons and a beer label credit of one hundred fifty dollars for each label registered.

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Bill Details

Versions:
S7344
S7344A
Legislative Cycle:
2011-2012
Current Committee:
Senate Finance
Law Section:
Tax Law
Laws Affected:
Add §§37 & 38, amd §210 & 606, Tax L

Votes

7
0
7
Aye
0
Nay
0
aye with reservations
0
absent
1
excused
0
abstained
show Investigations and Government Operations committee vote details

Sponsor Memo

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.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 7344--A

                            I N  S E N A T E

                               May 2, 2012
                               ___________

Introduced  by  Sens.  ZELDIN,  DILAN, SQUADRON, YOUNG -- read twice and
  ordered printed, and when printed to be committed to the Committee  on
  Investigations and Government Operations -- committee discharged, bill
  amended,  ordered reprinted as amended and recommitted to said commit-
  tee

AN ACT to amend the tax  law,  in  relation  to  establishing  the  beer
  production and beer label tax credits

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The tax law is amended by adding two new sections 37 and 38
to read as follows:
  S 37. BEER PRODUCTION CREDIT. (A) GENERAL. A TAXPAYER SUBJECT  TO  TAX
UNDER  ARTICLE  NINE-A  OR TWENTY-TWO OF THIS CHAPTER SHALL BE ALLOWED A
CREDIT AGAINST SUCH TAX PURSUANT TO THE PROVISIONS REFERENCED IN  SUBDI-
VISION  (B)  OF  THIS  SECTION.  THE CREDIT (OR PRO RATA SHARE OF EARNED
CREDIT IN THE CASE OF A PARTNERSHIP) FOR EACH GALLON OF BEER PRODUCED IN
NEW YORK STATE BY A LICENSED BREWERY OR A LICENSED TENANT BREWER  ON  OR
AFTER  APRIL FIRST, TWO THOUSAND TWELVE SHALL BE EQUAL TO FOURTEEN CENTS
MULTIPLIED BY THE NUMBER OF GALLONS PRODUCED NOT TO EXCEED  SIX  MILLION
TWO HUNDRED THOUSAND GALLONS. IF THE TAXPAYER IS A PARTNER IN A PARTNER-
SHIP OR SHAREHOLDER OF A NEW YORK S CORPORATION, THEN THE CAP IMPOSED BY
THE PRECEDING SENTENCE SHALL BE APPLIED AT THE ENTITY LEVEL, SO THAT THE
AGGREGATE  CREDIT  ALLOWED  TO  ALL THE PARTNERS OR SHAREHOLDERS OF EACH
SUCH ENTITY IN THE TAXABLE YEAR DOES NOT EXCEED SIX MILLION TWO  HUNDRED
THOUSAND GALLONS TIMES FOURTEEN CENTS.
  (B)  CROSS-REFERENCES.  FOR  APPLICATION OF THE CREDIT PROVIDED FOR IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210, SUBDIVISION 45.
  (2) ARTICLE 22: SECTION 606, SUBSECTIONS (I) AND (UU).
  S 38. BEER LABEL CREDIT. (A) GENERAL. A TAXPAYER SUBJECT TO TAX  UNDER
ARTICLE  NINE-A  OR TWENTY-TWO OF THIS CHAPTER SHALL BE ALLOWED A CREDIT
AGAINST SUCH TAX PURSUANT TO THE PROVISIONS  REFERENCED  IN  SUBDIVISION
(B)  OF  THIS SECTION. THE CREDIT (OR PRO RATA SHARE OF EARNED CREDIT IN
THE CASE OF A PARTNERSHIP) SHALL EQUAL ONE  HUNDRED  FIFTY  DOLLARS  FOR

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15721-05-2

S. 7344--A                          2

EACH BRAND OR TRADE NAME LABEL REGISTERED WITH THE STATE LIQUOR AUTHORI-
TY  FOR BEER THAT IS BREWED IN NEW YORK STATE BY THE TAXPAYER IN BATCHES
TOTALING FIFTEEN HUNDRED BARRELS OR LESS DURING THE TAXABLE YEAR.
  (B)  CROSS-REFERENCES.  FOR  APPLICATION OF THE CREDIT PROVIDED FOR IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210, SUBDIVISION 46.
  (2) ARTICLE 22: SECTION 606, SUBSECTIONS (I) AND (VV).
  S 2. Section 210 of the tax law is amended by adding two new  subdivi-
sions 45 and 46 to read as follows:
  45.  BEER  PRODUCTION CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO
BE COMPUTED AS PROVIDED IN SECTION THIRTY-SEVEN OF THIS CHAPTER, AGAINST
THE TAX IMPOSED BY THIS ARTICLE. THE CREDIT ALLOWED UNDER THIS  SUBDIVI-
SION  FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO
LESS THAN THE HIGHER OF THE AMOUNTS PRESCRIBED IN PARAGRAPHS (C) AND (D)
OF SUBDIVISION ONE OF THIS SECTION. HOWEVER, IF  THE  AMOUNT  OF  CREDIT
ALLOWED  UNDER  THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO
SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE  IN  SUCH  TAXABLE
YEAR  SHALL  BE  TREATED  AS  AN  OVERPAYMENT  OF  TAX TO BE CREDITED OR
REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
  46.  BEER  LABEL CREDIT.   A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE
COMPUTED AS PROVIDED IN SECTION THIRTY-EIGHT OF  THIS  CHAPTER,  AGAINST
THE  TAX IMPOSED BY THIS ARTICLE. THE CREDIT ALLOWED UNDER THIS SUBDIVI-
SION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR  TO
LESS THAN THE HIGHER OF THE AMOUNTS PRESCRIBED IN PARAGRAPHS (C) AND (D)
OF  SUBDIVISION  ONE  OF  THIS SECTION. HOWEVER, IF THE AMOUNT OF CREDIT
ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE  TAX  TO
SUCH  AMOUNT,  ANY  AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE
YEAR SHALL BE TREATED AS  AN  OVERPAYMENT  OF  TAX  TO  BE  CREDITED  OR
REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
  S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax law is amended by adding two new clauses (xxxiv) and (xxxv)
to read as follows:

(XXXIV) BEER PRODUCTION TAX CREDIT   AMOUNT OF CREDIT UNDER
UNDER SUBSECTION (UU)                SUBDIVISION FORTY-FIVE OF SECTION
                                     TWO HUNDRED TEN

(XXXV) BEER LABEL CREDIT UNDER       AMOUNT OF CREDIT UNDER
UNDER SUBSECTION (VV)                SUBDIVISION FORTY-SIX OF
                                     SECTION TWO HUNDRED TEN
  S 4. Section 606  of  the  tax  law  is  amended  by  adding  two  new
subsections (uu) and (vv) to read as follows:
  (UU)  BEER  PRODUCTION CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT TO
BE COMPUTED AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS CHAPTER  AGAINST
THE  TAX  IMPOSED  BY  THIS ARTICLE. IF THE AMOUNT OF THE CREDIT ALLOWED
UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED  THE  TAXPAYER'S
TAX  FOR SUCH YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX
TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF  SECTION
SIX HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER THAT NO INTER-
EST SHALL BE PAID THEREON.

S. 7344--A                          3

  (VV)  BEER  LABEL  CREDIT.  A TAXPAYER SHALL BE ALLOWED A CREDIT TO BE
COMPUTED AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS CHAPTER AGAINST THE
TAX IMPOSED BY THIS ARTICLE. IF THE AMOUNT OF THE CREDIT  ALLOWED  UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR
SUCH  YEAR,  THE  EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE
CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS  OF  SECTION  SIX
HUNDRED  EIGHTY-SIX  OF THIS ARTICLE, PROVIDED, HOWEVER THAT NO INTEREST
SHALL BE PAID THEREON.
  S 5. This act shall take effect immediately.

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