Tax Breaks for Beer Busted: Means More Expensive Suds

Bad news if you like to raise a few locally-made beers with friends at the local watering hole.

A pair of tax exemptions for local craft breweries has been found to be unconstitutional by a state court, according to a report in the New York Post. For breweries themselves, the ruling means thousands of dollars more in yearly costs. For fans of locally-crafted ales, lagers and other beer styles it can mean up to another dollar or so per pint.

According to the report, the ruling is the result of a complaint brought by Shelton Brothers, a beer importer based in Belchertown, Mass. In the suit, they claimed the lower prices New Yorkers paid compared to out-of-staters was unfair, and the court sided with them.

As a result New York-based beer makers must pay 14 more cents for every gallon of suds they sell in the state, and 12 more cents for every gallon sold in the city, effective immediately. The only way for businesses to offset the cost will be raising prices for consumers.

Mat Barclay, the manager of on Fifth Avenue, has mixed feelings about the ruling. But first and foremost, he is worried for his friends—the small-batch brewers in Brooklyn and Long Island.

“It’s worrisome, especially for my friends who are brewers—I don’t know if they’ll survive like they have after this ruling,” Barclay said, who is from Oceanside, Long Island where Barrier Brewing Co. makes their beer, two kegs at a time.

Barclay said that Barrier has almost 40 different kinds of beers and now with the excise tax and the label tax now in effect in New York, they’ll have to pay $150 per label. Even though they only sell kegs, each different kind of beer still needs a label on top of the keg.

“They aren’t going to have as many beers as they used to, it’s impossible for them,” Barclay said, explaining that if they wanted to keep every beer they had they would have to pay close to $6,000 just to register their labels with the State Liquor Authority.

He said he doesn’t know how it’ll affect his prices, but he said he will find out once he gets the invoice.

Barclay explained that most of the small local breweries, like Greenport Harbor Brewing Company, Kelso and Chelsea Brewing Company, who only sell kegs and not bottles, will feel it more than bigger distilleries like Brooklyn Brewery.

“It’s a bummer, but it was an unfair law and the ruling is correct,” Barclay said.

But the bartender at , on Fifth Avenue at the corner of Third Street, was much more frank with his feelings about the fact that local beer is going to be more expensive in New York.

“S@*t, anything that is costs more sucks,” Dave Sconzo, who grew up in Park Slope. “People already don’t have money to spend, so this is going to directly affect me: people won’t buy as much beer and it’s just another reason not to go to the bar in this economy.”