Tax relief on tap for New York breweries | News
TROY - There's been something distasteful brewing in New York State's craft beer industry lately although now, Senator Charles Schumer says he has a plan to fix it.
The problem arose last month after a state court ruled that state excise tax exemption gave New York breweries a competitive advantage over out-of-state breweries and was therefore unconstitutional.
That meant New York craft brewers had to pay higher state taxes; and that means higher prices at the grocery store and the local brew pub.
It's a beer industry brouhaha that has beer producers over a barrel.
As a result of the court decision, New York brew pub that produces 100,000 barrels of beer a year may have a cost increase of close to half a million dollars.
"We're all in growth so it's not going to kill us but what it would really do is slow our growth," says Gregg Stacy, Vice President of Marketing and Sales at Brown's Brewing Company in Troy.
Brown's opened in 1993 and has enjoyed steady growth ever since. They're planning to open a new Malt Room in their basement in the coming months as well as a new production facility in Hoosick.
"We will grow into about 20,000 barrels, then 40,000 barrels," Stacy says. "It (paying more taxes to the state) would mean jobs that we would not create. I don't think we'd have to let anyone go but there are jobs that would not be put onboard as quickly as they might otherwise."
The Federal Beer Act is something Senator Chuck Schumer (D- New York) has been pushing for more than a year. The extra money craft breweries would pay in state taxes would be made up by cutting their federal taxes in half.
"It was really bad news to learn we'd have the exemption taken away," Stacy says, "To hear that this is hopefully going to happen relatively soon is going to offset any losses that we'd experience."
Stacy says waiting for the federal legislation won't put Brown's out of business, instead they'll either end up absorbing what they can or else implement a price increase, which he says is inevitable for most businesses, although he says he never wants to see it for this reason.
While Senator Schumer continues pushing for federal legislation, there are also bills pending in the state senate and assembly that would provide further tax relief for breweries, an industry that impacts nearly 60,000 jobs and nearly $1.7 billion in wages across New York State.