Blue Point Brewery will certainly have something to toast if a proposed production tax credit gets approval from New York State lawmakers.
And that beer toast may soon also boast Long Island-grown hops.
Sen. Charles Schumer, a Democrat, and State. Sen. Lee Zeldin, R-Shirley, are hoping to offset the loss of an excise tax exemption that New York State micro and craft beer breweries enjoyed for decades with a new tax credit of 14 cents per gallon of beer made in for the first 6.2 million gallons produced in a taxable year.
Not only would it compensate for the $250,000 tax savings loss from the previous excise tax exemption but it will allow breweries to continue to expand and hire more employees, said the lawmakers.
For The Blue Point Brewing Company, the news is perfect timing as Long Island’s biggest brewery has just signed a contract to buy hops from a Long Island farmer, which will create more employment opportunities.
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“This [production credit] will help make up that lost exemption and help us keep building,” said Peter Cotter, owner and president of The Blue Point Brewing Company, which has doubled its staff in the last three years. The brewery could potentially gain about $100,000 in savings from reduced excise tax fees, according to Cotter.
“We just signed a contract that will allow us to buy hops locally and not import it from farmers out of state. It could be the start of a whole new industry on Long Island,” said Cotter.
Right now the Patchogue-based brewery buys its hops from Washington and Colorado farmers.
“It’s great that lawmakers are addressing the exemption loss with a new proposal and we’re appreciative of their actions," Cotter said. "It’s going to help us create more jobs.”
According to the lawmakers the previous tax exemption was for the first 200,000 barrels New York breweries produced in a year. It was deemed unconstitutional by a Supreme Court ruling several weeks ago.
The new legislation, say the lawmakers, will allow breweries to keep growing and expanding.
The plan is called the Brewer’s Employment and Excise Tax Relief Act and would cut the current $7 per barrel federal excise tax to $3.50 on the first 60,000 barrels, which could result in a potential savings of $210,000 per year. The proposal also would lower the tax by $2 on the next 1.94 million barrels, resulting in potential savings of $3.88 million each year for breweries.
According to an earlier press release from Schumer, the beer industry supports nearly 60,000 jobs in the state, and the tax cuts would impact 65 small brewing operations.
The legislation currently has 27 cosponsors and broad bipartisan support, according to Zeldin’s office.
The New York beer industry directly supports approximately 8,000 jobs through brewing and distribution, according to the release, and nearly 60,000 jobs overall when retail sales are factored in.