Relates to farm winery and farm distillery sales tax information return filing requirements.
TITLE OF BILL:
An act to amend the tax law, in relation to farm winery and farm distillery sales tax information return filing requirements
PURPOSE OF THE BILL:
The bill would exclude licensed farm wineries and farm distilleries from the sales tax information return filing requirements imposed by Tax Law § 1136 (i).
SUMMARY OF PROVISIONS:
Section 1 of the bill would amend Tax Law § 1136 (i) to exclude persons operating pursuant to a farm winery license or a farm distillery license issued by the State Liquor Authority ("SLA"), or pursuant to both such licenses, from the obligation to file the annual information return required by that subdivision.
Section 2 of the bill provides for an immediate effective date and applies the law to annual returns due on and after March 20, 2012.
Tax Law § 1136(i) requires "wholesalers," as defined in Alcoholic Beverage Control Law ("ABCL") § 3, that have made certain sales of an alcoholic beverage without collecting sales and use tax, to file annual information returns with the Department of Taxation and Finance ("DTF") that include the identity of any customers that qualify as sales tax vendors, and the volume of sales made to them. Both farm distilleries and farm wineries are covered by this requirement if they make sales to persons who may, in turn, make retail sales as permitted pursuant to retail licenses. See ABCL 61(2-c), 76-a(3).
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
STATEMENT IN SUPPORT:
The third-party sales tax reporting provisions require wholesalers to report all sales made to restaurants, bars and other retailers. DTF uses this information to verify sales as reported by those retailers. While farm wineries and farm distilleries that sell to retailers technically qualify as wholesalers, the burden imposed on them by the filing requirement outweighs any benefits received by the DTF. Farm
wineries and farm distilleries are by definition, small. A farm winery license limits the holder to producing no more than 150,000 gallons annually. A farm distillery license limits the holder to producing no more than 35,000 gallons annually.
Because of their restricted size, it is difficult for farm wineries and farm distilleries to absorb the cost of complying with the annual filing requirement. Exempting them will not undermine the effectiveness of the third-party reporting legislation, because purchases from farm wineries and farm distilleries account for a very small percentage of retailers' overall purchases. Moreover, farm wineries and farm distilleries are required to maintain sales records pursuant to requirements imposed by the SLA, which DTF may obtain upon request.
The amendments would take effect immediately and would apply to annual returns due on and after March 20, 2012.
STATE OF NEW YORK ________________________________________________________________________ 7019 IN SENATE April 23, 2012 ___________Introduced by Sens. RITCHIE, LAVALLE -- (at request of the Department of Agriculture and Markets) -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to farm winery and farm distil- lery sales tax information return filing requirements THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subparagraph (C) of paragraph 1 of subdivision (i) of section 1136 of the tax law, as added by section 1 of subpart G of part V-1 of chapter 57 of the laws of 2009, is amended to read as follows: (C) Every wholesaler, as defined by section three of the alcoholic beverage control law, if it has made a sale of an alcoholic beverage, as defined by section four hundred twenty of this chapter, without collect- ing sales or use tax during the period covered by the return, except (i) a sale to a person that has furnished an exempt organization certificate to the wholesaler for that sale; or (ii) a sale to another wholesaler whose license under the alcoholic beverage control law does not allow it to make retail sales of the alcoholic beverage. For each vendor, opera- tor, or recipient to whom the wholesaler has made a sale without collecting sales or compensating use tax, the return must include the total value of those sales made during the period covered by the return (excepting the sales described in clauses (i) and (ii) of this subpara- graph) and the vendor's, operator's or recipient's state liquor authori- ty license number, along with the information required by paragraph two of this subdivision. A PERSON OPERATING PURSUANT TO A FARM WINERY LICENSE AS PROVIDED IN SECTION SEVENTY-SIX-A OF THE ALCOHOLIC BEVERAGE CONTROL LAW, OR A PERSON OPERATING PURSUANT TO A FARM DISTILLERY LICENSE AS PROVIDED IN SUBDIVISION TWO-C OF SECTION SIXTY-ONE OF SUCH LAW, OR A PERSON OPERATING PURSUANT TO BOTH SUCH LICENSES, SHALL NOT BE SUBJECT TO ANY OF THE REQUIREMENTS OF THIS SUBDIVISION. S 2. This act shall take effect immediately and shall apply to annual returns due on and after March 20, 2012.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14252-01-2