Bill S7344A-2011

Relates to beer production and beer label tax credits

Relates to beer production and beer label tax credits; allows a credit against tax of fourteen cents for each gallon of beer produced in the state of New York by a licensed brewery for up to six million two hundred thousand gallons and a beer label credit of one hundred fifty dollars for each label registered.

Details

Actions

  • May 31, 2012: REPORTED AND COMMITTED TO FINANCE
  • May 22, 2012: PRINT NUMBER 7344A
  • May 22, 2012: AMEND (T) AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • May 2, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Meetings

Votes

VOTE: COMMITTEE VOTE: - Investigations and Government Operations - May 31, 2012
Ayes (7): Marcellino, Alesi, Golden, Nozzolio, Zeldin, Squadron, Peralta
Excused (1): Diaz

Memo

BILL NUMBER:S7344A

TITLE OF BILL: An act to amend the tax law, in relation to establishing the beer production and beer label tax credits

PURPOSE: To provide a tax credit for production of beer in the amount of 14 cents per gallon for up to the first 6,200,000 gallons and a Microbrewery Beer Label Credit.

SUMMARY OF PROVISIONS: This bill amends tax law to create a new beer production tax credit against the franchise and personal income tax of 14 cents per gallon for the production of beer in New York State by a licensed brewery or licensed tenant brewer for the first 6,200,000 gallons produced in a taxable year. It also amends the tax law to create a Beer Label Credit in the amount of one hundred and fifty dollars for each brand name or label registered with the state liquor authority for beer brewed in batches of fifteen hundred or less during the taxable year.

JUSTIFICATION: An unexpected and significant tax burden has recently been placed on New York State brewers following a Supreme Court ruling (Shelton v. NYS Liquor Authority & NYS Department of Taxation and Finance) that struck down an excise tax exemption contained in section 424(6) of the Tax Law for the first 200,000 barrels (6,200,000 gallons) of beer produced in New York. It also struck down an excise tax exemption for microbrewery labels created for beer produced in New York State. In order to obviate the negative economic impact of the Supreme Court ruling, a newly created Beer Production Credit and a newly created Microbrewery Beer Label Credit would allow licensed breweries and licensed tenant brewers a partial tax exemption for beer and labels produced in New York State.

LEGISLATIVE HISTORY: None.

FISCAL IMPLICATIONS: None for FYE 2012-2013 as the state fiscal plan accounts for the §424(6) tax exemption.

EFFECTIVE DATE: Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 7344--A IN SENATE May 2, 2012 ___________
Introduced by Sens. ZELDIN, DILAN, SQUADRON, YOUNG -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the tax law, in relation to establishing the beer production and beer label tax credits THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The tax law is amended by adding two new sections 37 and 38 to read as follows: S 37. BEER PRODUCTION CREDIT. (A) GENERAL. A TAXPAYER SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWENTY-TWO OF THIS CHAPTER SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX PURSUANT TO THE PROVISIONS REFERENCED IN SUBDI- VISION (B) OF THIS SECTION. THE CREDIT (OR PRO RATA SHARE OF EARNED CREDIT IN THE CASE OF A PARTNERSHIP) FOR EACH GALLON OF BEER PRODUCED IN NEW YORK STATE BY A LICENSED BREWERY OR A LICENSED TENANT BREWER ON OR AFTER APRIL FIRST, TWO THOUSAND TWELVE SHALL BE EQUAL TO FOURTEEN CENTS MULTIPLIED BY THE NUMBER OF GALLONS PRODUCED NOT TO EXCEED SIX MILLION TWO HUNDRED THOUSAND GALLONS. IF THE TAXPAYER IS A PARTNER IN A PARTNER- SHIP OR SHAREHOLDER OF A NEW YORK S CORPORATION, THEN THE CAP IMPOSED BY THE PRECEDING SENTENCE SHALL BE APPLIED AT THE ENTITY LEVEL, SO THAT THE AGGREGATE CREDIT ALLOWED TO ALL THE PARTNERS OR SHAREHOLDERS OF EACH SUCH ENTITY IN THE TAXABLE YEAR DOES NOT EXCEED SIX MILLION TWO HUNDRED THOUSAND GALLONS TIMES FOURTEEN CENTS. (B) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT PROVIDED FOR IN THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER: (1) ARTICLE 9-A: SECTION 210, SUBDIVISION 45. (2) ARTICLE 22: SECTION 606, SUBSECTIONS (I) AND (UU). S 38. BEER LABEL CREDIT. (A) GENERAL. A TAXPAYER SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWENTY-TWO OF THIS CHAPTER SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX PURSUANT TO THE PROVISIONS REFERENCED IN SUBDIVISION (B) OF THIS SECTION. THE CREDIT (OR PRO RATA SHARE OF EARNED CREDIT IN THE CASE OF A PARTNERSHIP) SHALL EQUAL ONE HUNDRED FIFTY DOLLARS FOR
EACH BRAND OR TRADE NAME LABEL REGISTERED WITH THE STATE LIQUOR AUTHORI- TY FOR BEER THAT IS BREWED IN NEW YORK STATE BY THE TAXPAYER IN BATCHES TOTALING FIFTEEN HUNDRED BARRELS OR LESS DURING THE TAXABLE YEAR. (B) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT PROVIDED FOR IN THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER: (1) ARTICLE 9-A: SECTION 210, SUBDIVISION 46. (2) ARTICLE 22: SECTION 606, SUBSECTIONS (I) AND (VV). S 2. Section 210 of the tax law is amended by adding two new subdivi- sions 45 and 46 to read as follows: 45. BEER PRODUCTION CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION THIRTY-SEVEN OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE. THE CREDIT ALLOWED UNDER THIS SUBDIVI- SION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE HIGHER OF THE AMOUNTS PRESCRIBED IN PARAGRAPHS (C) AND (D) OF SUBDIVISION ONE OF THIS SECTION. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON. 46. BEER LABEL CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE. THE CREDIT ALLOWED UNDER THIS SUBDIVI- SION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE HIGHER OF THE AMOUNTS PRESCRIBED IN PARAGRAPHS (C) AND (D) OF SUBDIVISION ONE OF THIS SECTION. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON. S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding two new clauses (xxxiv) and (xxxv) to read as follows: (XXXIV) BEER PRODUCTION TAX CREDIT AMOUNT OF CREDIT UNDER UNDER SUBSECTION (UU) SUBDIVISION FORTY-FIVE OF SECTION TWO HUNDRED TEN (XXXV) BEER LABEL CREDIT UNDER AMOUNT OF CREDIT UNDER UNDER SUBSECTION (VV) SUBDIVISION FORTY-SIX OF SECTION TWO HUNDRED TEN S 4. Section 606 of the tax law is amended by adding two new subsections (uu) and (vv) to read as follows: (UU) BEER PRODUCTION CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS CHAPTER AGAINST THE TAX IMPOSED BY THIS ARTICLE. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER THAT NO INTER- EST SHALL BE PAID THEREON.
(VV) BEER LABEL CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS CHAPTER AGAINST THE TAX IMPOSED BY THIS ARTICLE. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER THAT NO INTEREST SHALL BE PAID THEREON. S 5. This act shall take effect immediately.

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