Cuomo signs law to support craft breweries in New York State

Governor Andrew M. Cuomo traveled to the Matt Brewing Company in Utica on July 18 to sign legislation that will strengthen and help grow New York State’s vibrant craft beer industry.

The legislation is designed to support New York’s breweries and wineries, increase demand for locally grown farm products, and expand industry-related economic development and tourism. The legislation protects an important tax benefit for small breweries that produce beer in New York, exempts breweries that produce small batches of beer (regardless of location) from paying an annual State Liquor Authority fee, and creates a Farm Brewery license that will allow craft brewers to expand their operations through opening restaurants or selling new products.

“In addition to producing some of the finest beer in the world, New York’s craft breweries are creating jobs, supporting our state’s farmers and hops growers, as well as bringing in tourism dollars in local communities across New York,” Governor Cuomo said. “The legislation signed today demonstrates that the new New York is truly working for small business, as this law will allow breweries and wineries the opportunity to invest in new opportunities and expand their operations.”

Any brewery that produces 60 million or fewer gallons of beer in New York will now be eligible for a refundable tax credit applied against New York State personal income and business taxes. The credit is worth 14 cents per gallon for the first 500,000 gallons produced in New York, and 4.5 cents per gallon for the next 15 million gallons produced in the State.

These tax credits will help encourage the continued expansion of New York’s craft brewing industry, which already consists of more than 90 breweries, accounts for thousands of jobs and supports more than $200 million of economic activity each year. Under a previous law, small brewers in New York received an excise tax exemption, but the legal structure of the exemption was challenged, leading to its repeal. With the new benefits signed into law today, every small brewer will fare at least as well as they did under the prior exemption.

Breweries that produce brands of 1,500 barrels or less annually (regardless of location) are now exempt from the $150 annual brand label fee. This exemption, which is eligible to brewers in and outside of the state, will save New York breweries tens of thousands of dollars, and will help smaller breweries retain the capital they need to grow their operations and create jobs.

The legislation also creates a “Farm Brewery” license that will allow craft brewers that use products grown in New York State to operate in a similar fashion to the state’s farm wineries, leading to increased demand for locally grown farm products as well as expanded economic development and tourism.

In order to receive a Farm Brewery license, the beer must be made primarily from locally grown farm products. Until the end of 2018, at least 20 percent of the hops and 20 percent of all other ingredients must be grown or produced in New York State. From Jan. 1, 2018 to Dec. 31, 2023, no less than 60% of the hops and 60% of all other ingredients must be grown or produced in New York State. After January 1, 2024, no less than 90% of the hops and 90% of all other ingredients must be grown or produced in New York State.

The beer manufactured under these guidelines would be designated as “New York State labeled beer.” The legislation is modeled after the 1976 “Farm Winery Act,” which spurred the growth of wine production in this state, including the creation of 249 farm wineries and tripling the number of wineries.