On June 9, 2016, New York State Governor Andrew Cuomo signed a bill expanding the current Beer Production Credit to cover more forms of alcohol, such as cider, spirits and wine. This expanded Alcohol Production Credit will allow distillers, wineries and continue to allow breweries a fully refundable credit which in turn can be used to reinvest into their operations.
In order to be eligible for the credit, the producer must first be registered under Article 18 of the NYS Tax Law (concerning tax on alcoholic beverages). The credit is limited to smaller producers, with production limits as follows:
The credit is claimed on form CT-636 and is calculated as follows:
- 14 cents per gallon for the first 500,000 gallons of beer, cider, wine or liquor produced.
- 4.5 centers per gallon for each additional gallon over 500,000 but under 15,000,000 gallons.
As this is a NYS credit, it will only apply to production in NYS. Along with certain manufacturing incentives for viticulture and horticulture, NYS has made it clear that they want to provide encouragement for its vineyards, wineries and breweries to continue to grow and flourish within New York State. The expansion of this credit to alcohols outside beer has to be considered a strong victory for wineries and distilleries across New York State.
Edward McWilliams, CPA
Ed is a Partner in the firm’s tax and business advisory practice focusing on providing services to middle market private companies across different industries as well as to early stage startups. Ed has over a decade of experience providing tax and business consulting services to these companies of different sizes and across different industries, bringing a broad and diverse knowledge base and strategic solutions to the many complex issues that businesses face.