NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5498
SPONSOR: Maher TITLE OF BILL:
An act to amend the tax law, in relation to providing a tax incentive to
a taxpayer that grows base ingredients used for the production of beer
PURPOSE OR GENERAL IDEA OF BILL:
creates a tax credit for the agricultural production of ingredients
needed for brewing and distilling.
SUMMARY OF PROVISIONS:
Section 1: adds section 37-a to the state tax law to create a tax credit
for agricultural ingredients needed for beer production equal to the
costs necessary for the production of such ingredients, to provide the
crop is sold directly to a distributor registered, and to provide no
credit shall be allowed for any ingredient used to add flavor, color, or
alter characteristic of the beer.
Section 2: amends section 210-B of the tax law by adding subdivision 51
to provide for the tax credit imposed in Section 1 to be counted against
the tax imposed, including the ability for a provider to receive a
refund or overpayment credit should the amount of the production credit
exceed the overall tax liability.
Section 3: amends subparagraph B of paragraph 1 of subsection I of
section 606 of the state tax law by adding clause xliii to provide for
the beer production tax credit for shareholders of a New York S corpo-
ration.
Section 4: amends section 606 of the tax law by adding subsection eee to
provide for the beer production ingredients tax credit.
Section 5: sets the effective date.
JUSTIFICATION:
Between 2012 and 2014, the New York State Brewers Association has
reported that the number of New York State breweries has risen from 95
to 207. Many of these New York brewers look to locally sourced ingredi-
ents for their brews. This increase provides for a unique opportunity
for New York agricultural producers to provide locally grown materials
to these breweries, without the added cost of shipping agricultural
ingredients over a long distance. This tax credit would only apply to
the underlying cost of growing ingredients for brewing and would not
apply to any profits earned when selling the ingredients to the brewer-
ies.
Implementing an agricultural production tax credit for New York growers
will allow these producers to recoup the cost incurred in growing these
products. By providing such a credit, New York farmers could better
compete with agricultural producers in other states and in other coun-
tries. New York could see an increase in the number of farms and ingre-
dients produced, which would lead to an increase in jobs at these farms
within the state. Additionally, New York brewers would be able to
purchase more cost effective, locally grown ingredients, which would
give local breweries a more economical source of local ingredients.
PRIOR LEGISLATIVE HISTORY:
2021-2022: A.4291
2019-2020: A.5531 S.3190
2017-2018: A.4474 S.682
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined
EFFECTIVE DATE:
Immediately
STATE OF NEW YORK
________________________________________________________________________
5498
2023-2024 Regular Sessions
IN ASSEMBLY
March 13, 2023
___________
Introduced by M. of A. MAHER -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to providing a tax incentive to
a taxpayer that grows base ingredients used for the production of beer
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The tax law is amended by adding a new section 37-a to read
2 as follows:
3 § 37-a. Supplier of beer production ingredients tax credit. (a) Gener-
4 al. A taxpayer subject to tax under article nine-A or twenty-two of this
5 chapter shall be allowed a credit against such taxes in the amount spec-
6 ified in subdivision (b) of this section and pursuant to the provisions
7 referenced in subdivision (c) of this section.
8 (b)(1) The amount of the credit per taxpayer per taxable year (or pro
9 rata share of earned credit in the case of a partnership) shall be equal
10 to the cost borne by such taxpayer for the agricultural production of
11 ingredients necessary for the production of beer. Such costs shall
12 include the cost of seed, fertilizer, equipment, utilities, and employ-
13 ees' salaries.
14 (2) The credit allowed under this section shall only be applicable to
15 that portion of a taxpayer's crop that is sold directly to a distributor
16 registered under article eighteen of this chapter.
17 (3) The credit allowed under this section shall only apply to the base
18 ingredients necessary to produce beer. This credit shall not be allowed
19 for any ingredient or product that is used for the purpose of adding
20 flavor, color, or altering some other characteristic of the beer.
21 (c) Cross-references. For application of the credit provided for in
22 this section, see the following provisions of this chapter:
23 (1) Article 9-A: Section 210-B, subdivision 59.
24 (2) Article 22: Section 606, subsection (ooo).
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09198-01-3
A. 5498 2
1 § 2. Section 210-B of the tax law is amended by adding a new subdivi-
2 sion 59 to read as follows:
3 59. Supplier of beer production ingredients tax credit. A taxpayer
4 shall be allowed a credit, to be computed as provided in section thir-
5 ty-seven-a of this chapter, against the tax imposed by this article. If
6 the amount of the credit allowed under this subdivision for any taxable
7 year shall exceed the taxpayer's tax for such year, the excess shall be
8 treated as an overpayment of tax to be credited or refunded in accord-
9 ance with the provisions of section six hundred eighty-six of this chap-
10 ter, provided, however, that no interest shall be paid thereon.
11 § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
12 of the tax law is amended by adding a new clause (l) to read as follows:
13 (l) Supplier of beerAmount of credit under
14 production ingredients taxsubdivision fifty-nine
15 credit under subsection (ooo)of section two hundred ten-B
16 § 4. Section 606 of the tax law is amended by adding a new subsection
17 (ooo) to read as follows:
18 (ooo) Supplier of beer production ingredients tax credit. A taxpayer
19 shall be allowed a credit, to be computed as provided in section thir-
20 ty-seven-a of this chapter, against the tax imposed by this article. If
21 the amount of the credit allowed under this subsection for any taxable
22 year shall exceed the taxpayer's tax for such year, the excess shall be
23 treated as an overpayment of tax to be credited or refunded in accord-
24 ance with the provisions of section six hundred eighty-six of this arti-
25 cle, provided, however, that no interest shall be paid thereon.
26 § 5. This act shall take effect immediately and shall apply to taxable
27 years commencing on or after such effective date.
