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New York Legislature Amends Tax Law To Help Small Wineries

In recent news, the Assembly and Senate of New York both passed a bill to amend the state’s tax law. The bill proposed a change to the current law which would significantly help small wineries within the state. The summary of the bill provides that it “[e]xempts certain wineries from the requirement to file annual information returns” and is known as S04668 in the Senate and A06724 in the Assembly. Specifically, the bill amends Chapter 108 of the Laws of 2012 and exempts non-farm wineries that produce under 150,000 gallons of wine per year from filing annual information returns for transactions with sales tax vendors.

The justification is as follows (in pertinent part):

The 2009-10 Revenue Budget Bill (Chapter 57 of the Laws of 2009) enacted various tax compliance initiatives. One of the initiatives mandates the filing of annual information returns by certain third parties that do business with sales tax vendors . . . . In order to complete these information returns, valuable time and resources will be needed to compile and submit it on time. In 2012, farm wineries were exempted from this requirement but non-farm wineries are still burdened by this section of law. This bill would give small non-farm wineries the same exemption from filing.

This is certainly another step in a good direction for New York State, and state wineries will strongly benefit from this change. While New York recognizes a class of wineries called “farm wineries,” there are still many “small” wineries within the state that may not fall within the definition of a farm winery under New York law. For example, New York law requires that a farm winery to produce not more than 250,000 gallons per year and (generally speaking) requires farm wineries to manufacture and sell wine produced exclusively from grapes grown or produced in New York (or other fruits or other agricultural products grown or produced in New York). See, e.g.N.Y. ABC LAW § 76-a 5(a), 8(a). Not all “small” wineries would fall within New York’s carve outs for a “farm winery,” especially if said “small” winery does not use grapes exclusively grown and produced in New York. It seems that the law is starting to recognize that the needs of “small” wineries may be quite similar to those that fall within the traditional definition of “farm winery.”

The upcoming change in the law is just one of several significant changes that New York’s wine, beer, and spirits industry has undergone in the last few months. To learn more, read my most recent article in the Hudson Valley Wine Magazine (Summer 2015 edition).

For more information on New York State wine or alcohol law, direct shipping, or establishing a New York beverage business, please contact Lindsey Zahn.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

Lindsey A. Zahn

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Lindsey is the founder and author of On Reserve: A Wine Law Blog. She is an alcohol beverage and food attorney and is admitted to the New York State Bar.

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