For breweries, wineries, cideries, and distilleries in New York State, the Alcoholic Beverage Production Credit is a valuable tax incentive designed to support local producers and encourage growth in the industry.
If you or your business produces beer, wine, cider, or liquor, you may qualify for a refundable tax credit that can help lower your tax burden and improve your bottom line.
At Basso & Guida, we specialize in helping businesses maximize tax benefits and navigate industry-specific deductions. In this guide, we’ll break down who qualifies for this credit, how much you can claim, and what recordkeeping requirements you need to meet.
Who Is Eligible for the Alcoholic Beverage Production Credit?
This tax credit is available to registered distributors under Article 18 of the New York State Tax Law, which governs the taxation of alcoholic beverages.
To qualify, your business must have produced alcoholic beverages in New York State during the tax year, within the following limits:
- Beer: Up to 60 million gallons
- Cider: Up to 60 million gallons
- Wine: Up to 20 million gallons
- Liquor: Up to 800,000 gallons
If your business falls within these production limits and is a registered distributor, you may be eligible for the credit.
How Much Is the Credit?
The credit amount varies depending on the type of alcoholic beverage produced and the quantity. The most significant benefits apply to the first 500,000 gallons produced in New York State.
Credit Rates for the First 500,000 Gallons:
- Beer & Cider: $0.14 per gallon
- Wine: $0.30 per gallon
- Liquor (2%-24% ABV): $2.54 per gallon
- Liquor (Over 24% ABV): $6.44 per gallon
Credit Rates for Production Above 500,000 Gallons:
For production exceeding 500,000 gallons, a reduced credit rate applies up to:
- 15 million additional gallons for beer, cider, or wine
- 300,000 additional gallons for liquor
The reduced rates are:
- Beer & Cider: $0.045 per gallon
- Wine: $0.045 per gallon
- Liquor: $0.045 per gallon
This structure ensures that both small and large producers can benefit from the credit, with the most substantial savings for those producing at a lower volume.
What Are the Recordkeeping Requirements?
To claim the Alcoholic Beverage Production Credit, you must maintain accurate records to substantiate your eligibility. During an IRS or New York State audit, you may be required to provide detailed documentation proving:
- Your business is a registered distributor under Article 18 of the Tax Law
- The volume of each type of alcoholic beverage produced in New York State
- That the production levels claimed match your tax filings
- Any other financial or operational documentation requested by the state
For specific recordkeeping requirements, businesses should review Alcoholic Beverage Production Credit Recordkeeping Guidelines or consult with a tax professional to ensure compliance.
How to Claim the Credit
To apply for the Alcoholic Beverage Production Credit, businesses must submit the appropriate tax forms:
- For Corporations: File Form CT-636 (Alcoholic Beverage Production Credit for Corporations)
- For All Other Entities & Individuals: File Form IT-636 (Alcoholic Beverage Production Credit for Partnerships, Sole Proprietors, and Other Filers)
It’s essential to work with an experienced accountant to ensure all necessary forms are completed correctly and that your business is maximizing its tax savings.
Why This Credit Matters for Your Business
The Alcoholic Beverage Production Credit is more than just a tax break—it’s a financial incentive designed to:
- Encourage local beverage production and boost the New York economy
- Help businesses reinvest in growth by lowering tax liabilities
- Provide financial relief for small and mid-sized breweries, cideries, wineries, and distilleries
By leveraging this tax credit, your business can increase profitability, invest in new equipment, expand production, or improve operations.
How Basso & Guida Can Help
Navigating tax credits like the Alcoholic Beverage Production Credit can be complex, but that’s where we come in. At Basso & Guida, we provide Precision in Numbers and Passion in Service, ensuring that:
- Your eligibility for the credit is correctly assessed
- Your tax filings are accurate and optimized for maximum benefit
- Your records are audit-ready and compliant with New York State tax laws
- You’re aware of additional tax strategies that can help your business thrive
If you produce beer, cider, wine, or liquor in New York State, let us help you claim the credits you deserve and optimize your financial strategy.
📞 Schedule a Consultation to learn how we can assist with your tax planning and compliance needs.
Final Thoughts
The Alcoholic Beverage Production Credit is a valuable opportunity for beverage producers in New York State to reduce their tax burden and reinvest in their businesses. By understanding the eligibility requirements, maximizing credit benefits, and maintaining proper records, producers can take full advantage of this incentive.
Don’t leave money on the table. Whether you’re a craft brewery, a boutique winery, or a growing distillery, ensuring you correctly apply for this credit can save you thousands of dollars.
Let Basso & Guida handle the complexities while you focus on crafting great products. Contact us today to get started.
