(AP) — Small brewers are celebrating following news that state lawmakers will restore a tax break for craft breweries, averting a potential beer crisis that some brewers claimed could have boosted the sales price of craft beers by up to $1 a draft.
The 120-year-old F.X. Matt Brewery in Utica, which makes Saranac beer and Utica Club, was among the beermakers lobbying hard for the changes this spring.
Gov. Andrew M. Cuomo and state legislators have reached an agreement to reinstate the tax exemption, which had been removed after a state court ruled an exemption from state excise tax was unconstitutional. The package of laws announced Wednesday will even allow farmers to sell craft beer at farmers’ markets.
Senate Majority Leader Dean Skelos said the agreement on the tax break for brewers won’t cost New Yorkers a dime. Instead, the state exemption of 12 cents per gallon and New York City exemption of 14 cents per gallon, which were struck down by the lawsuit, will be replaced an equivalent tax credit.
"It will be a wash," said Skelos, whose chamber has sought this and other business tax breaks to help create jobs.
The new measures will allow craft brewers that use products grown in New York to operate like wineries, which can sell limited amounts of products directly from their own retail outlets. The bills are expected to be voted into law by the end of the Legislature’s regular session on June 21.
Farmer wineries would also be allowed to sell New York beers. In addition, farm-based breweries will be able to open restaurants, conference centers, inns, bed-and-breakfast lodgings or hotels on or next to their brewing operations, where beer-making equipment, souvenirs and other items could be sold.
The so-called craft beer industry in New York has doubled over the last 10 years and employs 3,000 jobs in the highly automated process, according to the industry. Brewery owners said that if the state didn’t act, the lost exemption would cost brewers $10,000 to $1 million a year depending on sales.