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Governor Cuomo Announces Sales Tax Exemption on Winery Tastings and $350,000 for Hops and Malting Barley Research

Food, Wine, & Dining, Local News, Press Releases

New Initiatives are Direct Result of the Wine, Beer, Spirits and Cider Summit.

Albany, NY - June 12, 2014 - Governor Andrew M. Cuomo today announced two initiatives stemming from the second Wine, Beer, Spirits and Cider Summit to support New York State's local wineries and breweries. Consumers can now enjoy tax-free tastings at wineries that charge a nominal per-person fee, and which are already exempt from paying a use-tax on the wine used for tastings. Additionally, $350,000 in funding will go to research hops and malting barley, key beer-brewing ingredients, to help specialists understand the varieties and differences that work best for New York agriculture.

“New York is home to world-class wineries and craft breweries, and by launching these initiatives we are looking to further grow the industry, as well as increase the production of locally made products,” Governor Cuomo said. “When New York brewers buy from New York growers and producers, jobs are created, our economy grows stronger and everyone wins.”

At the Summit in April, the Governor launched a $6 million marketing and promotional campaign to raise the profile of New York’s beverage producers – beer, spirits, cider, and the burgeoning wine industry. For more information about New York’s growing beer, wine, spirits and cider industries, visit the One Stop Shop and www.taste.ny.gov.

Sales Tax Exemption on Winery Tastings
Traditionally, a winery must collect tax when making retail sales of wine and wine products, whether they are sold by the bottle or glass. Although the state's Tax Law provided an exemption from taxes for when the products are used "at an event sponsored by a winery, farm winery, wholesaler or importer at its licensed premises," it did not before cover wine tastings. After a direct ask from winery owners at the Summit, the New York State Department of Taxation and Finance worked with the New York State Division of Alcoholic Beverage Control to clarify the exemption in a Technical Memorandum.

Funding for Hops and Malting Barley Research
A portion of the hops and malting barley funding will go toward research being conducted on a hops plot at the Geneva Experiment Station at Cornell University. Currently, researchers are evaluating approximately 30 varieties of hops to see which ones work best for New York’s craft brewing industry, as well as experimenting with pest management techniques to see which tools work best to combat certain diseases affecting hops, such as downy mildew. Currently there are approximately 225 acres of hops planted in New York State, of which 150 acres will be harvested this year—amounting to over 100,000 pounds of hops.

Specialists from Cornell will also experiment with malting barley on variety testing, integrated disease management, certified seed production, and weed management, and work to determine what types of barley work best in New York State farm-based beverages. Traditionally a feed crop in New York, this research will experiment to learn what winter and spring varieties work best in the state for the new purpose of this growing industry. Since most available varieties have been bred in western parts of North America and Europe, there is a great need to see what varieties will thrive here to produce a quality crop for malt houses, brewers and distillers.  

Craft breweries have experienced unprecedented growth over the past three years, with the number of microbreweries rising from 40 in 2011 to 100 today—an increase of 150 percent. In addition, as a result of Governor Cuomo’s 2012 Farm Brewery law, 48 new Farm Breweries have opened up across the state. 

State Agriculture Commissioner Richard A. Ball said, “Thanks in large part to Governor Cuomo’s leadership, these announcements represent significant advances for all of New York’s fast-growing beverage industry.  When we make it easier for more people to try New York wines, and when we invest in research to help the industry grow quickly, we create more jobs.  These key improvements will increase the momentum behind New York’s growers and producers and demonstrate that New York will keep its promises to foster growth.”

Senator Patty Ritchie said, “In recent years, New York State’s craft beer and wine businesses have become an even greater part of our state’s agriculture industry. As Chair of the Senate Agriculture Committee, I’ve made it a priority to support this growth and today, I’m pleased that Governor Cuomo is investing in the future of these industries and positioning them for further expansion, which will help to create jobs and boost our state’s economy."

Assemblyman Bill Magee, Chair of the Assembly’s Agricultural Committee said, “This new partnership led by Governor Cuomo, has brought about tremendous success with locally produced beer, wine and spirits in recent years. As this niche within our agricultural industry continues to develop, creating new jobs and strengthening local economies, the initiatives announced today will help farmers and producers improve their techniques for growing and selling their products, while extending a tax break to consumers who visit our wineries.”

New York Farm Bureau President Dean Norton said, “This is an exciting time for our craft beverage brewers as the demand for their products is rising rapidly. However, part of the future success in the hops and malting barley industry depends on the research that is necessary to support this burgeoning agricultural industry. New York Farm Bureau is very appreciative of the additional funding being devoted to this effort and for Governor Cuomo’s continued support of the craft and farm based breweries across New York that choose to use quality New York grown hops and malting barley. In addition, providing relief from sales tax for consumers that are sampling wine by the glass will help the wine industry grow their businesses and encourage more consumers to try our great New York State products.”

Jim Trezise, President of the New York Wine & Grape Foundation, said, “The sales tax exemption for wine tastings is good for consumers, wineries, and the State, and is the latest example of tangible benefits that flow from Governor Cuomo’s Summits on Wine, Beer, Spirits & Cider. Consumers can sample a number of different wines tax-free to discover the ones they like best, which of course will be subject to sales tax as usual if they are purchased. This saves consumers money, and saves wineries the time and effort of calculating and collecting sales tax on every sample. It’s ‘entrepreneurial government’ at its best.”

Executive Director of the New York State Brewers Association Paul Leone said, “There are many challenges facing the brewing industry in New York State, and sourcing enough locally grown ingredients is a major one. By dedicating these desperately needed resources to hops and barley research, Governor Cuomo is giving farmers and brewers an opportunity to once again lead the country as not only a producer of great craft beer, but the opportunity to supply every brewer in this state with enough locally grown hops and barley which will further support their local economies.” 

The Ronald P. Lynch Dean of the Cornell University College of Agriculture and Life Sciences Kathryn J. Boor said, "I am excited to see this significant investment in a renewed and growing agricultural industry in our state. We are pleased to be partners with the Governor's Office and the legislature on this initiative, and we look forward to bringing our research and extension resources to bear. We are confident that continuing innovation and expansion lie ahead."

Cornell Hop Specialist Steven G. Miller said, "The NYS hop industry is growing to meet the demand from consumers of the rapidly expanding craft brewing industry, including dozens of new Farm Breweries. These state funds for Cornell's Geneva Experiment Station will be used to continue research efforts there on hop varieties and pest management. Hop production in New York is quite different from the Pacific Northwest, where most hops are currently grown. Information from the work at Geneva will assist growers in choosing varieties and pest management strategies suitable for New York conditions."

Gary C. Bergstrom, Ph.D., Professor, Department of Plant Pathology and Plant-Microbe Biology at Cornell University said, “There’s great excitement about the potential for this malting barley crop right now. There are some obstacles that need to be overcome with the selection of varieties and details on how we grow the crop.  That said, the right approaches between government, the private sector and higher education have begun.  We’re excited to work with growers and industry to do everything we can to make sure this industry succeeds.”

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