BILL NUMBER: S9225
SPONSOR: MATTERA
 
TITLE OF BILL:
An act to amend the tax law, in relation to enacting the New York Farm
Distillery RTD Excise Tax Bill; and providing for the repeal of such
provisions upon expiration thereof
 
PURPOSE OR GENERAL IDEA OF BILL:
To establish a narrow, targeted excise tax adjustment for low-alcohol
readyto-drink (RTD) spirits products manufactured by eligible New York
farm distilleries and small craft distilleries, by applying a beer-
equivalent excise tax rate to such products in order to support New York
agriculture, small manufacturing, and independent liquor retailers.
 
SUMMARY OF PROVISIONS:
Section 1. This act shall be know and may be cited as the "New York Farm
Distillery RTD Excise Tax Bill"
Section 2. Subdivision 1 of section 424 of the tax law is amended by
adding a new paragraph
Section 3. Rules and Regulations Section 4. Reporting Requirements
Section 5. Effective Date
 
JUSTIFICATION:
New York State's craft beverage market is a growing and very beneficial
component of New York State's economy and job market. Unfortunately,
due to a significant increase in taxes for low "alcohol by volume" (ABV)
spirits and spirits-based "ready to drink" (RTD) beverages, the proprie-
tors of these small businesses have been at a severe disadvantage.
Currently, low-ABV, spirits-based RTDs are taxed up to eighteen times
more than beer RTDs, even at the same alcohol level. Additionally, high-
er excise taxes add to the cost disadvantage for spirits RTDs and reduce
pricing flexibility for independent liquor stores.
This has resulted in margin compression and the closure of numerous
breweries state-wide. These financial pressures and dissolutions nega-
tively affect breweries, independent liquor stores, and consumers.
The New York Farm Distillery RTD Excise Tax Bill would eliminate this
disparity and allow for fairer rules for these local businesses by
allowing for a beer-equivalent excise tax for RTDs under 2496 ABV, made
only by New York Farm Distilleries and Class A-1 distillers under 75,000
gallons, with guardrails, reporting, and a sunset.
The New York State Farm Distillery RTD Excise Tax Bill would not only
alleviate financial pressure off breweries to help them stay afloat, but
it would directly benefit and support New York State agriculture and
economic development. Sourcing ingredients from local farms increase the
demand for New York-grown grain and keep agricultural dollars in state,
and since regulations state that spirits are exclusively sold by inde-
pendent liquor stores, this bill also supports small businesses and
helps to create local jobs.
Lastly, this bill gives craft producers a fair chance to scale and
compete as consumer preferences evolve, which improves competitiveness
and product diversity in local liquor stores.
 
FISCAL IMPLICATIONS:
To be determined
 
EFFECTIVE DATE:
This act shall take effect on the first day of the first calendar quar-
ter commencing not less than ninety days after it shall have become a
law and shall expire and be deemed repealed five years after such effec-
tive date; provided, however, that such expiration shall not affect any
tax liability incurred prior to such date.

Statutes affected:
S9225: 424 tax law, 424(1) tax law