Part of this growth has to do with the state’s focus in recent years on trying to make it easier for craft beverage producers such as beer, cider and liquor producers to do business in New York. Much of the changes focused on easing financial and regulatory pressures in an effort to help craft beverage producers enjoy the same benefits that wineries do.
This year, the Legislature built on this progress and passed legislation which, if signed by the Governor, would exempt from sales tax tastings at licensed beer, cider and liquor producers. Under current law, only wineries are eligible to receive the sales tax exemption. This legislation would help craft beverage producers to market their products without consumers having to pay New York the additional tax.
In 2013, New York put into effect the Farm Brewery Law. The law created a Farm Brewery license, which enables craft breweries to operate similarly to wineries. The law was modeled after the 1976 Farm Winery Act, which spurred the growth of wine production in this state and helped create the Finger Lakes Wine Trails and other small wine trails throughout the state which bolstered tourism. The increase in tourists also benefits surrounding businesses such as hotels and restaurants.
Similar to the Farm Winery Act, with the farm brewery license brewers do not need an additional permit to serve beer by the glass. The license also permits farm brewers to make cider to be served by the glass. Brewers may sell their products at restaurants, conference centers, inns, bed and breakfasts or hotels the brewer owns in addition to tasting rooms and farmers markets. Selling related products such as beer-making equipment, souvenir items and food at breweries is also permitted under the new law. The law also provides tax breaks and relaxes some regulations and fees for breweries.
While the law was designed to increase demand and promote locally-produced beverages it was also created to support farmers. In order to receive the farm brewery license, brewers must use locally-grown produce in their beverages. By 2018, at least 20% of the hops used to make beverages and 20% of all other ingredients used in the product must be grown or produced in NYS. By 2024, no less than 90% of the hops and 90% of all other ingredients must be grown or produced in NYS in order for breweries to maintain their license. Not only will this policy help support local agriculture but it will help New York create and market a distinctive flavor. Interestingly, Volney is home to the largest barley malting operation in the eastern U.S.—an ingredient required in beer. The 1886 Malt House is located at the former Miller Brewery plant and is on track to supply more than 2,000 tons of barley malt each year.
Small businesses are vital economic drivers. Creating these types of policies is a step in the right direction toward helping this industry and other small businesses. If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 N. Second St., Fulton, NY 13069, by e-mail at [email protected], or by calling (315) 598-5185. You may also friend me, Assemblyman Barclay, on Facebook.