In need of capital to grow your business? Today’s breweries and distilleries have access to traditional financing as well as several alternative or lesser-known funding opportunities.

Bank Loans and SBA Loans

Conventional options such as bank loans and SBA loans present one avenue for financing your business’s growth. Beyond traditional bank loans and lines of credit, many banks (and other financial institutions) offer SBA loans to small businesses seeking funding. The Small Business Administration (SBA) guarantees SBA loans, encouraging lenders to participate. The 7(a) Loan Program—the SBA’s primary business loan program—is a popular option for brewers and distillers. Benefits of SBA loans include low interest rates, flexible terms, large loan amounts, and easier qualification. However, there are opportunities for breweries and distilleries to access capital beyond traditional bank and SBA loans.

NYS Linked Deposit Program

One lesser-known route for small businesses to obtain funding is through New York State’s Linked Deposit Program. The New York State Linked Deposit Program (LDP) is an economic development initiative under which eligible businesses can obtain commercial loans at an interest rate 2-3% lower than the prevailing rate, guaranteed to borrowers for a period of four years. Lending institutions include commercial banks, savings banks, savings and loan associations, credit unions, Pursuit Lending, and farm credit institutions. Eligible businesses include manufacturing firms with 500 or fewer full-time, NYS-based employees. In New York State, alcoholic beverage producers may qualify as manufacturers if they meet certain conditions, so as a brewery or distillery, you may be eligible to apply for loans under the Linked Deposit Program.

Inventory Financing

Another lesser-known financing option is inventory financing—a lending method through which businesses can use their inventory as collateral for a loan or line of credit. This method is especially beneficial for businesses that maintain large inventory levels, such as alcoholic beverage producers. The value of the inventory, which is assessed by the lender, determines the amount of the loan. Inventory financing is a way for businesses to increase cash flow while maintaining sufficient inventory levels.

Selling Inventory to Investors or Trading Firms

The last option we’ll discuss in this article involves the sale of inventory to investors or trading firms, who hold that inventory while it ages and increases in value. One such trading firm is Barrel Stock Trading Co., based out of Nashville, Tennessee. Barrel Stock Trading Co., led by company president Joe Goode, purchases whiskey barrels from distilleries, holds the barrels while the whiskey ages, and then sells them to investment partners or brands. This alternative investment strategy is not only a unique opportunity for investors, but is also an opportunity for alcoholic beverage producers to acquire immediate capital without having to wait for their inventory to age.

How Can We Help?

Above are just a few of the financing options available to breweries and distilleries looking to grow and improve their business. While you explore financing options for your brewery or distillery, you can count on RBT CPAs for all of your business’s accounting, tax, audit, and advisory needs. Give us a call today and find out how we can be Remarkably Better Together.

Over thirty different permits are available through the New York State Liquor Authority (SLA) for various purposes, including special events, transportation, and marketing. Applications for some of these permits can be completed online, while others must be mailed in. Each permit bears its own stipulations and conditions. This article will highlight some of the most popular permits issued the by the NYS Liquor Authority along with their provisions.

Following are three popular permits that are available online. To apply for online permits, you will need to log in to or create a NY.gov account.

One-Day Alcohol Event Permit

This permit, also known as the Temporary Alcohol permit, allows the sale and service of alcoholic beverages for consumption at an event for a period of 24 hours. The fee for the One-Day Alcohol Event Permit is $36 per point of sale, per day. Both licensees and members of the public can apply for this permit.

Caveats: Alcoholic beverages sold by the permit-holder must be consumed within the licensed area only. Under the ABC Law, no more than four permits may be issued for one location within a 12-month period (with the exception of certain Not-for-Profits). However, the NYS Liquor Authority may consider additional permits if provided with a letter of no objection by the municipality and police department.

Apply for the One-Day Alcohol Event Permit here.

Catering Permit

This one-day permit (valid for 24 hours) allows currently licensed on-premises retailers to provide alcohol at certain private events located off-premises. The applicant must provide food in addition to alcohol. The fee for the Catering Permit is $48 per point of sale, per day. Only active on-premises retail licensees can apply for this permit.

Caveats: The application for this permit must be submitted at least 15 business days prior to the event. Applicants cannot cater for themselves (they must be hired by a third party to cater the event). The food provided must meet the requirements of the ABC law.

Apply for a Catering Permit here.

Marketing Permit

The NYS Liquor Authority website states the following regarding the Marketing Permit:

A Marketing Permit authorizes a licensed manufacturer or wholesaler, or an unlicensed out-of-state supplier, or a licensed in-state supplier to:

• Conduct tastings and provide samples of the permit holders’ products to consumers;
• Accept orders from licensed retailers on behalf of a wholesaler licensed in NYS authorized to sell such products at wholesale; and
• Sell their products by the bottle to consumers during tastings

A Marketing Permit can be used at the following events/locations:

• An establishment licensed to sell at retail the alcoholic beverages that will be tasted (i.e. liquor store, bar, restaurant);
• The State Fair, recognized county fairs and farmers markets operated on a not-for-profit basis; and
• Outdoor and indoor gatherings, functions, occasions or events sponsored by a bona fide charitable organization

One-Time Tasting Permits cost $25, and Three-Year Tasting Permits cost $395.

Caveats: To use a Marketing permit for events not listed above, you must contact the Liquor Authority at least 15 days prior to the event to receive permission. The supplier or wholesaler cannot charge a fee to consumers attending the event. Samples cannot exceed 3 ounces for beer, wine products, and cider, 2 ounces for wine, and 1/4 ounce for liquor. Liquor and wine sold by the bottle must be price posted. The supplier must obtain a Transportation Permit to transport alcoholic beverages to the event location (or use a company with a Transportation Permit). Manufacturers may use a company-owned car.

Apply for a One-time Tasting Permit here.

Apply for a Three-year Tasting Permit here.

Other Permits

Many other permits are available online, including Bottling Permits, Brewer Tasting Permits, Trucking Permits, and Warehouse Permits, to name a few. A complete list of online permits, along with their descriptions and fees, can be found here. Some permits are not available online, including the Temporary Operating Permit, the Liquidator’s Permit, the Solicitor Permit, the Sunday On-Premises Sales Permit, the Wine/Liquor Auction Permit, and others. Applications for these permits must be printed, completed manually, and mailed to the New York State Liquor Authority. Visit this page to see a full list of these permits and to download applications.

Contact Us

While you focus on permit applications for your business, you can depend on RBT CPAs to focus on your business’ accounting, advisory, audit, and tax needs. Give us a call today to find out how we can be Remarkably Better Together.

Is your business making the most of tax benefits this year? As annual tax deadlines approach, consider the following credits and deductions available to breweries and distilleries in New York State.

1. Section 179 and Bonus Depreciation

 Section 179 allows business owners to deduct the full cost of tangible property placed into service during the tax year. Eligible property includes machinery, equipment, certain vehicles, computers, software, and more. For a full list of eligible property, see IRS publication 946. For tax years beginning in 2024, the maximum expense deduction businesses can take is $1,220,000. This limit decreases when more than $3,050,000 worth of Section 179 property is placed into service during the tax year.

Bonus depreciation is another immediate expense deduction available to brewers and distillers. Bonus depreciation allows business owners to deduct a percentage of the cost of newly acquired property. The bonus depreciation rate for 2024 is 60 percent for certain qualified property. Note: Beginning in 2022, bonus depreciation percentages began decreasing as the incentive started phasing out. The rate will continue to go down by 20 percent each year until 2027 when the phase-out will be complete.

Combining Section 179 and bonus depreciation can result in significant tax savings for business owners. If you plan to utilize both benefits, keep in mind that Section 179 must be applied first.

2. Alcoholic Beverage Production Tax Credit

 Registered distributors who produce beer, cider, wine, or liquor in New York are eligible for the Alcoholic Beverage Production Tax Credit if, during the tax year, they produced a maximum of 60 million gallons of beer or cider; 20 million gallons of wine; or 800,000 gallons of liquor.

For the first 500,000 gallons produced in the state, the tax credit equals:

• 14 cents per gallon of beer or cider
• 30 cents per gallon of wine
• $2.54 per gallon of liquor with alcohol by volume (ABV) between 2% and 24%
• $6.44 per gallon of liquor with an ABV above 24%

For amounts in excess of 500,000 gallons, the credit equals 4.5 cents per gallon up to 15 million additional gallons of beer, cider, or wine and up to 300,000 additional gallons of liquor. During an audit, you may be required to prove entitlement to the tax credit by providing copies of various forms (click here for a list.)

Please note that this credit is taxable. For more information, check out our article on the taxability of the NYS Alcohol Production Tax Credit.

3. Tipped Employee Credits

FICA Tip Credit

If you employ food and beverage service workers who customarily earn tips and you pay Social Security and Medicare taxes on those tips, you may be eligible to credit a portion of what you pay against your business income taxes. Recordkeeping requirements apply.

New York Tip Credit

If you employ food and beverage service workers who earn at least $30 a month in tips, a portion of those tips may be used to satisfy your minimum wage obligation. When taking this credit, recordkeeping and reporting requirements apply. More information on the NYS Tip Credit can be found here.

Conclusion

Don’t miss out on opportunities to maximize your tax benefits this year. These credits and deductions can save you money on taxes, and capital which can then be used to reinvest in your business. For more information on tax benefits available to your business, contact our experts at RBT CPAs. Our firm is here to support your business’s accounting, advisory, tax, and audit needs. Give us a call today to find out how we can be Remarkably Better Together.

Especially when it comes to taxes, you should always take credit where credit is due!

Following are highlights of numerous tax credits that may be available to your business, related to employees, research and development, your product, whether your business is part of a farm operation, and more. Becoming familiar with what’s available can help you ensure you’re tracking and documenting the right information so you can take credit where credit is due.

Alcoholic Beverage Production Credit

Registered distributors who produce beer, cider, wine, or liquor in New York are eligible if during the tax year, they produce 60 million or fewer gallons of beer; 60 million or fewer gallons of cider; 20 million or fewer gallons of wine; or 800,000 or fewer gallons of liquor. Each year, the tax credit for the first 500,000 gallons produced in the state equals $.14/gallon of beer or cider; $.30/gallon of wine; $2.54/gallon of liquor with an ABV of 2% to 24%; or $6.44/gallon of liquor with an ABV over 24%. For amounts over 500,000 gallons, the credit equals $.045/gallon for up to 15 million gallons of beer, cider, and wine and up to 300,000 gallons of liquor. Recordkeeping and forms required to claim the credit are here.

Employing Employees in Certain Protected Classes In New York

You may receive tax credits when you employ a veteran, a person with disabilities, youth between the ages of 16 and 24, and people recovering from substance use disorder. Federal tax credits are also available when you hire individuals from certain targeted groups under the Work Opportunity Tax Credit.

Federal Fuel Tax Credit

Through 2024, farms and breweries may qualify if they use fuel for off-highway purposes, such as running equipment and machinery. The IRS has identified this as one of its “dirty dozen” or among the most abused tax breaks so extra care must be made when claiming the credit.

Federal R&D Tax Credit

Reduce your federal tax liability dollar for dollar to offset quarterly payroll taxes by up to $500,000 for qualifying research activities. For breweries and distilleries, the credit may be available for activities resulting in product changes; process changes to improve waste reduction and efficiencies; new sustainable practices; and more. Credits are based on money spent on employees’ time, contractor expenses, and supplies and equipment. See IRS Form 6765 for details.

FICA Tip Credit

If you have food and beverage service workers who customarily earn tips and you pay Social Security and Medicare taxes on those tips, you may be eligible to credit a portion of what you pay against your business income taxes. Recordkeeping requirements apply. A draft of IRS Form 8846 is also available, with additional information.

New York Tip Credit

If you employ food and beverage service workers who earn at least $30 a month in tips, a portion of those tips may be used to satisfy your minimum wage obligation. This applies to work hours producing tips or supporting tip-producing work that is not performed for more than 20% of an employee’s workweek. To take this credit, recordkeeping and reporting requirements apply.

If You Operate Your Brewery at a Farm

Farm Employer Overtime Credit

New for 2024, eligible farmers who pay a farm employee overtime, may be eligible for a tax credit.

Farm Workforce Retention Credit

If you are a farm employer or owner of a farm employer in New York and have an eligible farm employee employed for at least 500 hours, you may be eligible for an annual credit of $1,200.

Excelsior Job Program

If you have an agricultural operation in New York that is expanding and will result in at least five new jobs, you may be eligible for job tax credits, investment tax credits, R&D tax credits, property tax credits, and child care services tax credits. Click here for more information.

Investment Tax Credit

Eligible farms that place qualified property into service during a tax year may qualify to claim 20% of the cost. If you qualify for the investment tax credit and more than double your employee count as a result, you may also be eligible for the New York Employment Incentive Credit.

There are even credits if you purchase an automated external defibrillator, pay premiums for eligible long-term care insurance,  pay school taxes, rehabilitate a historic building, rehabilitate a barn built before 1946, sponsor an apprenticeship program, and more.

If you need help identifying potential tax credits that may be available to your brewery, distillery, and/or distribution business, you can count on RBT CPAs. We can also help you ensure your recordkeeping practices will enable you to take full advantage of what’s available.

RBT CPAs has been a leading provider of accounting, audit, advisory, and tax services to Hudson Valley businesses, non-profit organizations, municipalities, and individuals for the past 55 years. Give us a call so you can see how we can be  Remarkably Better Together.

RBT CPAs never offshores work outside of the U.S. so you always know who is handling your financial information.

As you go about your business, it also helps to stay apprised of what’s on the legal horizon so you can start thinking about what a new or updated law may mean to you and what you may need to do to ensure compliance.

Nutrition & Allergy Label Transparency

The U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) is in the midst of exploring mandatory disclosure rules to include nutritional information, ingredients, alcohol content, and major allergens on all cans and bottles.

In February and March, the TTB held listening sessions and collected public comments from brewers, winemakers, distillers, drinkers, and the general public as it considers whether alcoholic drinks should be labeled with the same nutritional information as other foods and beverages. This includes calories, carbs, fat, protein, and more, along with allergen information.

Small breweries and wineries are arguing against the requirement due to the burden of having annual lab tests; potential delays in label approvals and bringing products to market; and related revenue implications. In lieu of printing, some are advocating to follow the European Union’s lead of using QR codes to link to nutritional information. Proposed rules are expected to be introduced this year and, if adopted, a multi-year implementation will likely ensue.

CHEERS

The Creating Hospitality Economic Enhancement for Restaurants and Servers (CHEERS) Act was introduced to help restaurants, bars, and other businesses operating draft beer systems. The Act provides incentives to expand tap lines and keg equipment in commercial establishments, and to do so with energy efficiency top of mind.

With the backing of numerous industry groups, the CHEERS Act passed the U.S. House of Representatives in March and is now moving to the U.S. Senate for consideration. If all goes well, tax incentives for qualifying investments in energy-efficient systems will be expanded to include keg, tap, and draft line property. This could translate into significant savings for business owners and a boost for the environment.

Bubble Tax Modernization Act

In mid-January, the Bubble Tax Modernization Act was introduced to Congress with the goal of amending a carbonization tax disparity for lower alcohol cider, mead, and wine made with fruit.

Thanks to the Craft Beverage Modernization and Tax Reform Act, low-ABV carbonated grape wines are taxed at $1.07 a gallon. There is no carbonization tax on fruited beers, seltzers, and ready-to-drink cocktails. However, low-ABV fruit wine, cider, and mead have been left out of carbonation and tax advantages. The Bubble Tax Modernization Act seeks to level the playing field.

Talent-Related

Since the start of the year, a number of people-related laws have taken effect, impacting employers across industries. Changes impact interviewing and hiring practices, overtime rules, minimum wage, independent contractor rules, paid breast milk expression breaks and prenatal leave, pregnant workers fairness, and non-compete agreements. If you need assistance developing or executing an implementation plan to promote compliance, Visions Human Resource Services – an RBT CPAs affiliate – is available to help. Contact a client manager at info@VisionsHR.com or call 845-567-3978 for more information.

And, as always, if your organization needs any accounting, audit, tax, or advisory services, you can continue to count on RBT CPAs to do the job professionally, ethically, on time and within budget. Get in touch so we can show you how we can be Remarkably Better Together.

Please Note! Visions Human Resource Services – a wholly owned subsidiary of RBT CPAs, LLP – and RBT CPAs, LLP are not law firms. Nothing in this article should be construed as legal advice. Should you need legal advice, contact your legal counsel. 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data. 

A tax credit reduces the amount of taxes you owe, dollar for dollar. Tax credits are available at the federal and state levels. Here are some highlights about of two tax credits every brewer/distiller/distributor business should explore.

New York’s Alcoholic Beverage Production Credit

Starting tax years beginning on or after January 1, 2023, distributors may be eligible for a higher Alcoholic Beverage Production Credit than what was available in the past. Registered distributors who produced beer, cider, wine, or liquor in New York are eligible if during the tax year 60 million or fewer gallons of beer; 60 million or fewer gallons of cider; 20 million or fewer gallons of wine; and 800,000 or fewer gallons of liquor were produced.

For the first 500,000 gallons produced in the state, the tax credit equals:

• $.14/gallon of beer or cider
• $.30/gallon of wine
• $2.54/gallon of liquor with alcohol by volume (ABV) not less than 2% and not more than 24%
• $6.44/gallon of liquor with an ABV above 24%

For amounts in excess of 500,000 gallons, the credit equals $.045/gallon up to 15 million additional gallons of beer, cider or wine and up to 300,000 additional gallons of liquor. During an audit you may be required to prove entitlement to the tax credit by providing copies of various forms (click here for a list.) For more information about the credit, click here.

Federal R&D Tax Credit

The Federal R&D tax credit reduces federal tax liability dollar for dollar; unused amounts can be carried forward for 20 years. It can apply to a range of qualifying research activities (QRAs) in all size businesses and across numerous industries. Qualified small businesses can use the R&D credit to offset quarterly payroll taxes up to $500,000.

When it comes to breweries and distilleries, they may be eligible for R&D tax credits for activities relating to brewing and distillation processes that result in product changes; updating fermentation processes or changing ingredients to develop new flavors; streamlining processes for product improvements, waste reduction and efficiencies; new sustainable and eco-friendly practices; and more. Credits are based on money spent on employees’ time; contractor expenses; related supplies and equipment; and more.

For more information from the U.S. Chamber of Commerce, click here. (Kubiak, Lauren. “How to Qualify for and Claim the R&D Tax Credit.” November 13, 2023. www.uschamber.com.)

Please note: the preceding information provides highlights related to tax credits; there’s a lot more involved impacting eligibility, documentation, and such. RBT CPAs accounting, audit, tax, and business advisory professionals can help you make the most of the tax credits available to your business. To learn more, give us a call.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Earlier this year, we reported on Governor Hochul’s Commission to Study Reform of the Alcoholic Beverage Control (ABC Law) in an attempt to modernize the state’s liquor laws (some of which purportedly date back to the end of the Prohibition Era in 1933). In May of this year, the commission released a 192-page report containing proposed changes, but the state’s legislative session ended without any updates. That changed in mid-October when Governor Hochul signed a handful of bills.

On October 14, Governor Hochul amended six pieces of legislation that took effect immediately, including:

• Legislation S.2854/A.7305 Expands Hours of Operation for Liquor and Wine Stores on Sundays Up until the change, liquor stores were limited to open at 12 p.m. Starting October 16^th, sales are allowed from 10 a.m. to 10 p.m., leveling the playing field with bars and restaurants. (This is one of the 18 changes recommended by Governor Hochul’s Commission in May.)
• Legislation S.5731/A.6941 Allows for the Retail Sale of Beer on Sundays Now, beer, mead, braggot, and cider may be sold any day of the week, including Sunday. (Previously, sales for off-premises consumption were not allowed between 3 a.m. and 8 a.m. on Sundays.)
• Legislation S.6443/A.6135 Lengthens the Duration of a Brewer’s License Previously, brewers were required to renew their license once a year. Now, that law has been updated to require renewal once every three years, reducing administrative burdens on brewers, while promoting equity between brewers and other alcohol producers that were only required to renew once every three years.
• Legislation S.3364A/A.2902 Authorizes the Use of a Pressurized Mixing and Dispensing System So businesses can prepare and keep drinks that contain alcohol in pressurized dispensing machines.
• Legislation S.3567A/A.6050A Permits the Sale or Promotional Gifting of Certain Complementary Products for Wine and Spirits As a result, retail stores can sell complementary gift and promotional items related to wine and spirit sales.
• Legislation S.6993A/A.7688 Relates to Licensing Restrictions for On-Premises Alcohol Consumption for Manufacturers and Wholesalers of Alcoholic Beverages at Specific Locations This expands the list of premises exempt from laws restricting manufacturers/wholesalers and retailers from having a shared interest in a liquor license.

(It is important to note that some counties may have stricter rules. It is always in your best interest to consult legal counsel with questions.)

In the press release announcing the legislative changes, Governor Hochul said, “Across New York, breweries, distilleries, and other alcoholic beverage businesses are creating jobs and expanding economic opportunity. I’m proud to sign this legislation that will modernize the laws governing the sales of alcoholic beverages in New York.”

We hope your business benefits from these changes and that there will be more to come. Stay tuned! In the meantime, please remember RBT CPAs is here to help with your accounting, tax, audit, or business advisory needs. Interested in learning more? Give us a call today.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.