In the News: New Pennsylvania Brewery Sales Tax

Theodore J. Zeller III, Esquire, a Member of Norris McLaughlin, P.A., and Chair of its Liquor Law Practice Group, was contacted to be interviewed by multiple local media sources regarding the new brewery sales tax bulletin as general counsel to the Brewers of Pennsylvania.

UPDATE: The effective date of January 1, 2020, mentioned in the blog post below has been updated to October 1, 2019. See “Raise a Glass: Pennsylvania Breweries Avoid Excessive Sales Tax Under New Law” for more information.

In the Reading Eagle’s “First Draft: Deadline looms for brewery tax,” Ted commented on the new brewery sales tax to take effect January 1, 2020. Through the efforts of the Brewers of Pennsylvania, the Pennsylvania Department of Revenue had extended the original January 1, 2019, enforcement date, to July 1, 2019, for its bulletin imposing a sales tax on breweries’ direct sales to customers. As a result, they continued to be exempt from collecting sales tax from customers for sales at its breweries and tap rooms. The Brewers of Pennsylvania and Norris McLaughlin continued to work with the Department of Revenue to evaluate an appropriate sales tax collection method and rate and to permanently update the Tax Reform Code.

However, Pennsylvania’s House of Representatives passed a bill last week that matches the tax breweries pay with other retailers. As of January 1, 2020, breweries that sell beer from a taproom must charge a 6% sales tax. The article states that “[u]nless something changes between now and July 1, the way Pennsylvania breweries collect and remit tax on the beer they sell on-site will change.”

“The Brewers of Pennsylvania has worked closely with the governor’s office to craft a resolution which ensures breweries pay sales tax at fair rates like other retailers in the industry,” Ted commented previously in The Philadelphia Inquirer’s “Pennsylvania breweries might dodge sales tax bullet set to take effect on July 1.” Working with Gov. Tom Wolf's office, Ted and the Brewers of Pennsylvania created a bill, scheduled to go to the Senate this week, that would increase the tax amount breweries must collect and remit, but not as steeply as the Department of Revenue’s initial decision. “This legislation will allow breweries in Pennsylvania to continue to build their businesses and try to make Pennsylvania the best beer state in the U.S., if it isn’t already,” Ted also told The Morning Call for their article, “Compromise in planned taproom sales tax lessens burden on breweries.”

Stay tuned for more information, as this office will continue to be in the middle of negotiating a fair resolution that will result in important changes to the Tax Reform Code. For additional information about this matter or any federal and Pennsylvania liquor law matters or general manufacturing and distribution advice, please contact Ted at tzeller@norris-law.com or call our offices at 610-391-1800.