Court ends tax exemption for craft brewers

Craft brewers based in New York state are facing a bigger tax bill for 2012 after a decision by the state Supreme Court disallowed a tax exemption on beer brewed and sold in New York.

The court”™s decision in Shelton v. NYS Liquor Authority and NYS Department of Taxation and Finance ends the state”™s tax exemption for the first 6.2 million gallons of beer brewed in New York and sold or used in New York in any given calendar year.

As a result of the ruling, distributors are subject to a tax of 14 cents per gallon on all beer sold in New York state on or after March 28, and an additional 12 cents per gallon on all beer sold in New York City.

Scott Vaccaro, founder of Captain Lawrence Brewing Co. in Elmsford, said the ruling would effectively stunt the recent growth that has been experienced by the state”™s craft brewers.

“The industry is growing, it”™s adding jobs, and this is a great way to stop that from continuing,” Vaccaro said.

If Captain Lawrence hits its projections for the year, the additional tax will cost the brewery $87,000, not counting New York City taxes, Vaccaro said.

“It”™s going to cost us a decent amount of money,” he said. “Hopefully the state will come up with a solution.”

Vaccaro suggested legislation that would give craft brewers tax credits or other incentives for capital investments and expansions.

Captain Lawrence recently moved from its original Pleasantville location to a larger facility in Elmsford, opening in February after investing $1.5 million in the new premises.