As you may remember, we last reported in October on the ongoing tax debate for craft brewers in the state. The BOP was able to delay the enforcement to allow more time for evaluation. As a result, the direct sales tax to customers at breweries and tap rooms remain sales tax exempt until July 1, 2019.
Well the BOP fought hard and the decision favors breweries! See the below full press release, detailing exactly what happened.
BOP Applauds the Pennsylvania General Assembly Passing HB262
Brewers of Pennsylvania, Governor, State Legislators Work Together to Support PA Breweries
HARRISBURG, PA (6.28.19) – The Brewers of Pennsylvania (BOP), the state’s official brewers guild, supports the passing of HB262 by the Pennsylvania General Assembly on June 28, 2019. For over 18 months, the BOP has worked with state legislators and the Governor’s office to avoid a large, across-the-bar sales tax that would have severely slowed the craft beer momentum in Pennsylvania. The BOP considers the passing of HB262 a celebration for PA brewers.
On July 27th, 2018, the Pennsylvania Department of Revenue (DOR) put out a tax bulletin requiring Pennsylvania breweries to collect a 6 percent sales tax for every dollar of beer sold directly to consumers via taprooms, tasting rooms, and brewpubs. The application of this tax was set to go into effect July 1st, 2019. Believing this taxation would negatively impact PA breweries in all 67 counties, while stifling a growing industry that provides thousands of jobs for local communities, the BOP is pleased to report that the Tax Code has been amended to bring fairness and parity to sales tax collection among restaurants, taverns, grocery stores, and brewery taprooms across the Commonwealth.
Under the bill amending the Tax Code, which the BOP expects the Governor to sign, Pennsylvania breweries will pay 6 percent sales tax on 25 percent of the retail sale to its consumer. This formula will balance a sales tax assessment as if it is being assessed on the wholesale price amount, similar to what restaurants, taverns, and grocery stores pay. Other county taxes imposed on sales are preserved and this amendment only clarifies any confusion surrounding breweries paying sales tax on consumer sales at their premises. The change will affect a brewery’s sales to consumers for both on and off premise consumption. The BOP expected the current DOR bulletin will be suspended and replaced with this new tax law.
“The Brewers of Pennsylvania and the Governor’s office were able to bring fairness and parity to sales tax collection among restaurants, taverns, grocery stores, and brewery taprooms across Pennsylvania,” said Chris Lampe, BOP President. “This is a big legislative win for BOP members and non-members across the state, and we look forward to further collaborations with the Governor and Pennsylvania legislators to level the playing field for our great Pennsylvania brewing industry.”
The BOP has worked hard at having a major seat at the Pennsylvania legislative table. Passing of HB262, despite opposition from other organizations in the beer industry, illustrates the strength of the state’s official brewers guild. The BOP appreciates the efforts of the Brewery Sales Tax team under the BOP, the Governor’s office, and the Pennsylvania Legislature. Pennsylvania is one of the best beer states in the U.S., and the BOP remains dedicated to the craft beer industry.
The passing of the new law will impact operations and Point of Sale systems for all Pennsylvania brewers. The BOP will detail the amended tax code, address key learnings, and provide helpful insights at the association’s Mid-Atlantic Brewers Symposium September 5-6 in State College. BOP members and non-members are strongly encouraged to attend.
About the Brewers of Pennsylvania – The Brewers of Pennsylvania is a 501c6 trade association that brings together leaders of Pa.-based breweries in order to promote and protect the brewing industry in the state. The Brewers of Pennsylvania, a strong and influential organization, serves the consuming public of Pa. by encouraging brand diversity in the market. BOP members employ an estimated 10,000 employees earning $296 million in wages and generating $1.1 billion in direct economic benefits to communities throughout the state. The BOP’s signature event is the annual Meeting of the Malts #supportPAbeer
