Have you been waiting to buy that new 20 barrel Brite tank?\u00a0 How about buying more kegs to distribute your beer?\u00a0 Beginning July 1, Pennsylvania breweries will have a new incentive to purchase brewing equipment, machinery, or cooperage used in the beer manufacturing process.\u00a0 It is with great pleasure that we welcome back the Malt Beverage Tax Credit.<\/p>\n
Expired since 2008, the Malt Beverage Tax Credit is back in Pennsylvania.\u00a0 Prior to this year, the Malt Beverage Tax Credit was in effect from January 1, 1974, to December 31, 2008.\u00a0 The revival of this tax credit was championed by the Brewers of Pennsylvania, an organization Norris McLaughlin proudly represents and supports.\u00a0 The legislation will provide a tax credit, to be counted against a brewery\u2019s Pennsylvania malt beverage excise tax liability, on any capital expenditure that expands brewery operations.\u00a0 This is important and a major win for the brewing industry in Pennsylvania because, unlike distilleries within the Commonwealth, brewers pay a special excise tax on their production at a rate of a penny per pint or $2.48 per barrel to the Department of Revenue for beer sold in the State.\u00a0 Essentially, now brewers can invest and upgrade their facilities, while receiving a credit against payment of the excise tax for the new dollars invested.<\/p>\n
The tax credit applies to qualified capital expenditures for the amounts paid to purchase items of plant, machinery, or equipment for use by the brewer in the manufacturing of beer.\u00a0 However, the qualified capital expenditures shall not exceed $200,000 annually per brewery.\u00a0 The term \u201camounts paid\u201d includes amounts actually paid and amounts promised to be paid under firm purchase contracts executed on or after July 1.\u00a0 Further, the tax credit cannot exceed the amount of qualified capital expenditures.\u00a0 Brewers must file the claim within one year of the date of purchase of qualified capital expenditures.\u00a0 The Department of Revenue has not released the forms that will be used for this process, but you will have to request the tax credit, have it certified by the Department of Revenue, and it will issue a certificate that you will give to the Secretary of Revenue.<\/p>\n
Ultimately, what this means for your brewery is that if you plan to enter into any contracts and make any expenditures for brewing equipment, machinery, or cooperage, and can wait to do so until July 1, you should wait and claim the tax credits against your PA excise taxes for 2017.\u00a0 If you entered into the contract before July 1, the capital expenditures will not qualify even if the payment comes after July 1.<\/p>\n
For information regarding national and state liquor law matters or general manufacturing and distribution advice, please contact our\u00a0Liquor Law, Licensing, Manufacturing, and Distribution Practice Group<\/a>: Liquor Law Department Chair\u00a0Theodore J. Zeller III, Esquire <\/a>(tzeller@norris-law.com<\/a>); David C. Berger, Esquire<\/a>\u00a0(dberger@norris-law.com<\/a>) for Pennsylvania and New Jersey retail and manufacturing licensing; or contact our offices at 610-391-1800.<\/p>\n","protected":false},"excerpt":{"rendered":" Have you been waiting to buy that new 20 barrel Brite tank?\u00a0 How about buying more kegs to distribute your beer?\u00a0 Beginning July 1, Pennsylvania breweries will have a new incentive to purchase brewing equipment, machinery, or cooperage used in the beer manufacturing process.\u00a0 It is with great pleasure that we welcome back the Malt […]<\/p>\n","protected":false},"author":9,"featured_media":402,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[9,19,34],"tags":[101,102,103,104,105,106],"coauthors":[],"acf":[],"yoast_head":"\n