Syracuse (WSYR-TV) – Two New York tax exemptions that have helped small breweries save thousands of dollars are a year have been declared unconstitutional – and that means cost increases are on tap for the state’s breweries.
Until now, New York brewers enjoyed tax breaks at the expense of out-of-state brewers.
A pint of beer is expected to go up at least a dollar and a wholesale case of beer will jump at least 48 cents. The cost of a keg will increase about $3.50.
One local brewery that was counting on the tax break is now facing a new hurdle.Good Nature Brewery
opened just a few months ago and business is overflowing.
But a surprise $750 bill signaled the owners to the end of a state tax exemption for small breweries. The increase, they say, couldn’t have come at a worse time.
“It would be less of a problem for us if, for instance, we hadn’t written the business plan for our expansion before this happened,” Carrie Blackmore of Good Nature Brewery.
The brewery was planning on growing six and one half times what they can produce in one year – but now they have to factor in the new tax to their business plan.
At their current production rate, they’ll pay $3,000 more a year in excise tax. After their expansion, it would be $11,000.
“We were planning on hiring at least one full time and one part time employee and I don't think we're going to do that cause our tax liability is going to increase so much,” Blackmore said.
They also wanted to expand their selection – but each new beer will now require a $150 annual registration fee.
“You can also see how that would limit the incentive to offer a variety of beers,” Blackmore said.
According to the New York State Brewers Association, two thirds of all barrels of beer brewed in New York State are subject to the excise tax. The association is urging Gov. Andrew Cuomo to reconsider the end of the exemption.