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New York Exempts Farm Breweries from Tax Filing Requirements

  • Oct 30, 2012 | Gail Cole

If you own a farm brewery in New York, you might be exempt from certain tax filing requirements. Farm Breweries have been growing throughout New York State in recent years, creating jobs and pouring billions into the economy.

In an effort to support local businesses, recent legislation allows for the establishment of farm breweries and excludes them from certain tax filing requirements. 

Under New York law, alcoholic beverage wholesalers must file annual sales tax information returns to the commissioner (TSB-M-09(10)S)  and (TSB-M-09(10.1)S). The law reads that "[t]he following persons must file, in addition to any other return..., annual information returns with the commissioner providing ... information ... about their transactions with vendors..." and includes in the list "[e]very wholesaler, ... if it has made a sale of an alcoholic beverage, without collecting sales or use tax during the period covered by the return... ."

The amendment, however, exempts businesses operating under a farm brewery license from filing these annual sales tax information returns. It's one less hoop to hop.

Applicable tax law reads:

"A person operating … pursuant to a farm brewery license as provided in section fifty-one-a of the alcoholic beverage  control  law, or  a  person  operating  pursuant to any combination of such licenses, shall not be subject to any of the requirements of this subdivision." (Tax Law section 1136(i)(1)(C))

One hoop is removed, and another is put in its place. The farm brewery license, which has an annual cost of $320, is designed to "promote New York State-grown ingredients." Much like estate wineries, farm breweries grow some or all of the ingredients in their beer. Over time, licensed farm breweries will be required to include more and more New York-grown ingredients in their products:

  • No less than 25% of its hops and no less than 40% of all other ingredients for the first five years;
  • No less than 60% of its hops and no less than 75% of all other ingredients for the next succeeding five years.
  • No less than 90% of its hops and no less than 90% of all other ingredients in subsequent years.

New York once grew approximately 90 percent of the nation's hops. The countryside was populated with hundreds of hop barns, where hops were dried and stored prior to use. These days, a movement is afoot to preserve the remaining barns and build new ones. It is estimated that hops will cover some 100 acres by 2013. (The New York Times). Given the new legislation, this industry can't grow quickly enough.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.