He will pay another $20,000 to $25,000 to the city.
The previous tax exemption applied to in-state brewers who made less than 200,000 barrels per year. However, when an out-of-state brewer sued in an upstate court on grounds that the exemption was unconstitutional, the court agreed, and the exemption was removed in March.
Now lawmakers are pushing a bill to give New York brewers, of which there are about 90 throughout the state, a tax credit to get some of that money back.
The legislation would give small breweries a tax credit on barrel production and brand label registration fees. Without it, brewers face an annual tax increase of $10,000 to $1 million that will hinder their ability to expand and hire employees, and may lead to beer price increases, according to sponsors of the bill.
“A New York beer production credit will let our small brewers keep growing, while keeping their beers affordable,” said Brooklyn State Senator Daniel Squadron, the lead Democratic co-sponsor of the bill. “That's more jobs and better options at the tap, which is something we should all toast to.”
Hindy said the removal of the tax exemption will cost the Brooklyn Brewery, which brews roughly 180,000 barrels of beer annually, about $600,000 in the next year.
“The point of the exemption was to encourage the small brewing industry in New York State, and it worked,” he said.
Hindy said without fiscal relief from Albany, the brewery will have to raise its beer prices to afford its taxes. He added that the brewery is currently trying to figure out how to come up with the roughly $50,000 a month and how long it will be until they raise prices.
Hindy said that unless a bill passes before the Legislative session ends on June 21, the tax could result in smaller breweries closing their doors.
“It's a very big impact on us and very bad news for our planning for this year,” he said.