senate Bill S7728

Signed By Governor
2011-2012 Legislative Session

Establishes a beer production tax credit for beer produced within the state by a taxpayer that is registered as a distributor; repealer

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Archive: Last Bill Status - Signed by Governor


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jul 18, 2012 signed chap.109
Jul 17, 2012 delivered to governor
Jun 19, 2012 returned to senate
passed assembly
ordered to third reading rules cal.375
substituted for a10695
Jun 18, 2012 referred to ways and means
delivered to assembly
passed senate
ordered to third reading cal.1300
Jun 15, 2012 referred to rules

Votes

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Co-Sponsors

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S7728 - Bill Details

See Assembly Version of this Bill:
A10695
Law Section:
Tax Law
Laws Affected:
Add §37, amd §§210 & 606, rpld §424 sub 6, Tax L; amd §107-a, ABC L

S7728 - Bill Texts

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Establishes a beer production tax credit for beer produced within the state by a taxpayer that is registered as a distributor.

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BILL NUMBER:S7728

TITLE OF BILL:

An act to amend the tax law, in relation to establishing a credit under
articles 9-A and 22 of such law for beer produced within the state by a
taxpayer that is registered as a distributor under article 18 of the tax
law; to amend the alcoholic beverage control law, in relation to the
exemption from the beer label registration fee; and to repeal subdivi-
sion 6 of section 424 of the tax law, relating to the exemption for beer
produced and sold within the state by certain distributors under article
18 of the tax law

PURPOSE:

This bill would encourage the growth of so-called "craft breweries" and
small breweries in New York and would create an incentive for brewers
located outside New York to build production facilities and create jobs
within the State.

SUMMARY OF PROVISIONS:

Sections 1 through 4 of the bill would provide refundable corporate
franchise and personal income tax credits for beer produced within the
State by registered distributors that produce 60 million or fewer
gallons of beer in a taxable year. For the first 500,000 gallons of beer
so produced, the amount of the credit would be 14 cents per gallon. For
each gallon of beer produced in New York in the taxable year in excess
of 500,000 gallons, the credit would be four and one-half cents per
gallon. No credit would be allowed for any beer produced in excess of
15.5 million gallons in the taxable year. If the amount of the credit
exceeds the taxpayer's tax for the year, the excess credit would be
credited or refunded to the taxpayer.

Section 5 of the bill would repeal the excise tax exemption in Tax Law
section 424(6) for beer brewed and sold in New York State by certain
brewers.

Section 6 of the bill would amend the exemption from the beer label
registration fee in ABC Law § 107-a(4)(g). As amended, the exemption
would apply to beer produced in small batches by both in-state and out-
of-state brewers.

Section 7 of the bill provides the effective date.

EXISTING LAW:

Until recently, Tax Law § 424(6) exempted from the excise tax on alco-
holic beverages, the first 200,000 barrels of beer brewed in New York,
and then sold or used in New York by a distributor who is also a brewer
and whose principal executive office is located in New York. This

exemption also applied to New York City's alcoholic beverage tax. On
March 28, 2012, this exemption was declared unconstitutional in Shelton
v. NYS Liquor Authority and NYS Department of Taxation and Finance as
was ABC Law section 107-a(4)(g), which exempted all beer produced in
small batches in New York State from the beer label registration fee
which is $150 per brand label.

STATEMENT IN SUPPORT:

This bill would replace the State excise tax exemption (but not the New
York City excise tax exemption) with a refundable credit under the
corporate franchise and personal income taxes. A registered distributor
that produces 60 million or fewer gallons of beer in New York would be
allowed a tax credit of 14 cents per gallon (the current excise tax rate
on beer) for the first 500,000 gallons of beer produced, and 4.5 cents
per gallon on the remaining gallons, up to the cap of 15.5 million
gallons. Unlike the former excise tax exemption, this bill would not
restrict the credit to gallons produced by New York State brewers.

This bill would also extend the exemption from the beer label registra-
tion fee to all beer produced in batches of 1,500 barrels or less,
regardless of where produced, to avoid discriminating against beer
produced outside of New York. The exemption is particularly important to
craft brewers, many of whom produce many artisanal brands in small quan-
tities each year.

BUDGET IMPLICATIONS:

This bill is not expected to have a significant impact on the State's
budget.

EFFECTIVE DATE:

This bill would take effect immediately and apply to taxable years
beginning on or after January 1,2012; provided, however, that Sections 5
and 6 shall be deemed to have been in full force and effect as of March
28, 2012.

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

    S. 7728                                                 A. 10695

                      S E N A T E - A S S E M B L Y

                              June 15, 2012
                               ___________

IN  SENATE -- Introduced by Sens. ZELDIN, GRIFFO, SEWARD, YOUNG, ROBACH,
  NOZZOLIO -- (at request of the Governor) --  read  twice  and  ordered
  printed, and when printed to be committed to the Committee on Rules

IN  ASSEMBLY -- Introduced by COMMITTEE ON RULES -- (at request of M. of
  A. Brindisi, Lentol, Barrett, Bronson, Cymbrowitz, Gabryszak,  Lifton,
  Lupardo, Magee, Millman, Morelle, Roberts, Russell, Schimminger, Skar-
  tados,  Zebrowski)  --  (at  request of the Governor) -- read once and
  referred to the Committee on Ways and Means

AN ACT to amend the tax law, in relation to establishing a credit  under
  articles  9-A and 22 of such law for beer produced within the state by
  a taxpayer that is registered as a distributor under article 18 of the
  tax law; to amend the alcoholic beverage control law, in  relation  to
  the  exemption  from  the  beer  label registration fee; and to repeal
  subdivision 6 of section 424 of the tax law, relating to the exemption
  for beer produced and sold within the state  by  certain  distributors
  under article 18 of the tax law

  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 a new section 37  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, THAT  IS  REGISTERED
AS  A  DISTRIBUTOR  UNDER  ARTICLE  EIGHTEEN  OF  THIS CHAPTER, AND THAT
PRODUCES SIXTY MILLION OR FEWER GALLONS OF BEER IN  THIS  STATE  IN  THE
TAXABLE YEAR, SHALL BE ALLOWED A CREDIT AGAINST SUCH TAXES IN THE AMOUNT
SPECIFIED  IN  SUBDIVISION  (B)  OF  THIS  SECTION  AND  PURSUANT TO THE
PROVISIONS REFERENCED IN SUBDIVISION  (C)  OF  THIS  SECTION.  PROVIDED,
HOWEVER, THAT NO CREDIT SHALL BE ALLOWED FOR ANY BEER PRODUCED IN EXCESS
OF FIFTEEN MILLION FIVE HUNDRED THOUSAND GALLONS IN THE TAXABLE YEAR. IF
THE  TAXPAYER IS A PARTNER IN A PARTNERSHIP 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD12160-01-2

S. 7728                             2                           A. 10695

THE  PARTNERS  OR  SHAREHOLDERS  OF EACH SUCH ENTITY IN THE TAXABLE YEAR
DOES NOT EXCEED THAT CAP.
  (B)  THE  AMOUNT  OF  THE CREDIT PER TAXPAYER PER TAXABLE YEAR (OR PRO
RATA SHARE OF EARNED CREDIT IN THE  CASE  OF  A  PARTNERSHIP)  FOR  EACH
GALLON OF BEER PRODUCED IN THIS STATE ON OR AFTER APRIL FIRST, TWO THOU-
SAND TWELVE SHALL BE DETERMINED AS FOLLOWS:
  (1)  FOR  THE  FIRST FIVE HUNDRED THOUSAND GALLONS OF BEER PRODUCED IN
THIS STATE IN THE TAXABLE YEAR, THE CREDIT SHALL  EQUAL  FOURTEEN  CENTS
PER GALLON; AND
  (2) FOR EACH GALLON OF BEER PRODUCED IN THIS STATE IN THE TAXABLE YEAR
IN  EXCESS OF FIVE HUNDRED THOUSAND GALLONS, THE CREDIT SHALL EQUAL FOUR
AND ONE-HALF CENTS PER GALLON.
  (C) 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 2. Section 210 of the tax law is amended by adding a new subdivision
45 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. IN NO EVENT SHALL  THE  CREDIT  ALLOWED
UNDER  THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCE THE TAX DUE FOR SUCH
YEAR TO LESS THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (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 ACCORD-
ANCE 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 a new  clause  (xxxiv)  to  read  as
follows:
(XXXIV) BEER PRODUCTION CREDIT       AMOUNT OF CREDIT UNDER SUBDIVISION
UNDER SUBSECTION (UU)                SUBDIVISION FORTY-FIVE OF
                                     SECTION TWO HUNDRED TEN
  S  4. Section 606 of the tax law is amended by adding a new subsection
(uu) to read as follows:
  (UU) 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. 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. Subdivision 6 of section 424 of the tax law is REPEALED.
  S 6. Paragraph (g) of subdivision 4 of section 107-a of the  alcoholic
beverage  control law, as amended by chapter 535 of the laws of 2005, is
amended to read as follows:
  (g) The authority shall exempt from such fee provisions the  registra-
tion  of  each  brand label used for beer that is produced in small size
batches [on the licensed premises in batches] totaling  fifteen  hundred
barrels of beer or less annually.

S. 7728                             3                           A. 10695

  S  7. This act shall take effect immediately, and shall apply to taxa-
ble years beginning on or after January 1, 2012; provided, however  that
sections  five  and six of this act shall be deemed to have been in full
force and effect on and after March 28, 2012.

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