“The Georgia Department of Revenue is proposing to again allow brewers to sell tours of their facilities at different prices based on the quality and amount of beer customers receive as “free souvenirs.”
While it’s far from granting brewers their ultimate wish of being able to sell beer directly to consumers, Monday’s announcement puts the manufacturers back where they thought they were after legislation passed in 2015.” – Aaron Gould Sheinin, AJC
Read more here: http://www.myajc.com/news/news/state-regional-govt-politics/georgias-craft-brewers-applaud-proposed-rules-on-s/nqymy/
“Georgia’s craft breweries and distilleries aren’t keeping up with their fast-growing competitors in other states, a state lawmaker said Wednesday.
The state’s breweries are two and a half times less profitable on average than those elsewhere, Rep. Michael Caldwell, R-Woodstock, told members of the House Special Rules Committee. Combined with below-average growth in the number of new distilleries, Georgia is losing 12,700 jobs a more robust industry could otherwise create, Caldwell said.” — Dave Williams, Atlanta Business Chronicle
Read more here:
“Georgia Department of Revenue officials said Monday they are stepping up enforcement of the rules for buying alcohol to be served at special events.
The rules mainly apply to nonprofits, although businesses and for-profit organizations also are affected.
Violations would result in an administration citation. A hearing officer could fine the event organizers anywhere from $100 to $500.
Mike Earnest, assistant director of the alcohol and tobacco division, said complaints filed with the DOR related to how and where nonprofits obtain their alcohol are largely responsible for the stepped up enforcement.
The agency is now getting up to 2,500 requests a year for special event licenses.
“Business owners are looking at these more and they’re saying these events may not be following all the laws and regulations,” Earnest said.
The alcohol must come from a licensed wholesaler — to ensure the excise tax is paid — and must be delivered directly to the site of the event.” — Doug Walker
I am curious which “business owners” are upset about the way special events are being managed and which business owners actually filed complaints.
Nevertheless, special event permittees, indeed, are required to purchase alcohol from wholesalers.
Here’s a great piece by Matt Kempner that provides some insight into Reformation Brewing out of Woodstock:
“Spencer Nix is an evangelical pastor who really, really likes a good beer.
He likes it so much, in fact, that he brews it. For a living. As a business.
There’s an odd balancing that goes into preaching the Gospel and selling suds. For instance, as the CEO of Woodstock-based craft beer maker Reformation Brewery, Nix makes sales visits to owners and managers of local stores, restaurants and bars. He usually does this on Thursdays, after spending part of the morning fine-tuning his Sunday sermons, including a recent one on the severity of God.
Severe is not a word I would use to describe Nix, after chatting with him a couple times. Consider that one of his brewery mottoes is “Set beer free.”
He and the 14 other employees at Reformation set 1,600 barrels of beer free last year and expect to unleash another 3,000 this year throughout north Georgia. That includes a couple seasonals and six year-round brews (an ale, IPA, white, porter, stout and tripel, in case you are into that kind of stuff).” – Matt Kempner, AJC
Read more here: http://www.myajc.com/news/business/heavenly-balance-a-craft-beer-brewing-evangelical-/nqXCs/
Nick Rider is a CPA and manager at Mauldin & Jenkins and has 8 years of experience in public accounting. Mauldin & Jenkins is an active Allied Trade Member of the Georgia Craft Brewers Guild. Nick’s primary focus in public accounting has been in Pass-through and Individual taxation focusing on the manufacturing and real estate industries. Nick has graciously offered to guest blog, here, on the following topics, at least as a start: Research and Development Credits (this article); Domestic Production Activities Deduction; GA Retraining Credits; and New Employee Credits.
Without further ado, here’s Nick’s post about Research and Development Credits:
Innovation, efficiency, productivity, and increased profits, are just a few of the reasons why companies invest heavily in Research and Development. For Craft Breweries this process is vital, not only to each company, but to the industry as a whole. While an investment in R&D can be beneficial to a company’s long-term success, it usually means large expenses at the onset of the project. Luckily for businesses, credits are available, at both the Federal and State level, to help lower the tax burden on taxpayers who are actively involved in research and development. While the Federal credits get most of the attention during planning, Georgia also has a tax credit that can be used. A taxpayer is eligible for the credit if they are allowed a Federal research credit and have qualified research expenses in Georgia. The calculations for the GA R&D credit are a little different than that of the Federal credit, but can mean a credit of 10% of qualified expenses over a calculated base amount.
Businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, and research and development that have qualified research expenses can claim the credit. While the main focus for Craft Brewers in Georgia is typically on the development of new flavors, there should also be a focus on the processes used. Development or improvements to a product or a process qualify as research and development activities. The process improvement could focus on bottling and canning line optimization, new boiler heat points, automated filling and transfer processes, and the list goes on and on. Georgia uses the same definitions of qualified research expenses that are used at the Federal level. These expenses include in-house expenses paid for research activities, including wages and supplies used to conduct the research if conducted in Georgia. Also included is 65% of the expenses paid to outside contractors for research efforts.
The credit can be used to offset up to 50% of a taxpayer’s remaining tax liability after all other credits have been applied. But this is where the GA credit really differentiates itself from other credits; if a taxpayer’s credit exceeds 50% of their tax liability, the excess may be taken as a credit against the monthly or quarterly withholding tax payments. This could be a great incentive for a business to base their R&D out of GA versus another state that may only allow for a credit carry-forward. The credit can also be passed through to investors of a pass-through entity when the business has no tax liability of its own. The credit must first be taken on the business return to establish the amount of credit that is available to be passed through. The individual taxpayer can then file their personal return and claim the credit that is available.
As with any tax strategy, planning is critical and you shouldn’t make decisions based solely on the tax consequences. Always consult your tax advisor before making any decisions on the use of Federal and State credits.
Stay tuned for more coming soon (and thanks, Nick!).
“Craft Beer Guild LLC — a Massachusetts beer wholesaler responsible for selling about 200 craft brands from around the U.S. — has agreed to pay more than $2 million for violating state laws that prohibit unfair trade practices and illegal activities, the Boston Globe reported.
In February, after more than 15 months on investigation, the Massachusetts Alcoholic Beverages Control Commission (ABCC) handed Craft Beer Guild a 90-day license suspension for offering inducements and unfair discounts in exchange for guaranteed retail placements — a practice known in the beer industry as “pay-to-play.”
In lieu of serving the suspension, Craft Beer Guild agreed to pay a fine equal to 50 percent of its daily gross profit, multiplied by the number of days its license was scheduled to be suspended.” — Chris Furnari, Brewbound
Read more here: http://www.brewbound.com/news/boston-globe-craft-beer-guild-to-pay-2-6-million-in-fines
Here’s a very interesting article in Paste Magazine by Jim Vorel with comments by Nancy Palmer – Executive Director of the Georgia Craft Brewers Guild:
http://www.pastemagazine.com/articles/2016/03/walking-the-line-sexuality-in-craft-beer.html
“On if there’s an inherent problem with sexuality in advertising:
‘It’s very problematic for me. But I’m not limited to that opinion in craft beer, I’d feel that way about any product that used male-perspective female sexuality to entice customers. I’m not enticed, and it makes me feel significant distance between me and the brand—these are not my people. I also find it to be a short-sighted way to be in business. Why would you alienate 50% of the population that happens to account for about 70% of the grocery store purchases? I feel like a brand using that marketing doesn’t take itself seriously, and so I don’t either. I assume that the beer is of lower quality and that the business people behind it are ill-advised at best, totally clueless at worst.’” – Nancy Palmer, Executive Director of the Georgia Craft Brewer’s Guild
Unfortunately, craft beer bills died in Mississippi senate and house committees. The silver lining: folks are continuing to become educated on the important issues affecting the craft beer industry. It’s slow process, but with good people like attorney Matthew McLaughlin fighting the fight, sooner or later change is coming.
Read more here: http://www.natchezdemocrat.com/2016/02/24/local-brewer-disappointed-beer-bills-die-in-legislature/
I had a great time leading a class at Yale Law School on the complexities of beverage-alcohol law.
“A new local group, Pretoria Fields Brewing Company, plans to build an 18,000 square foot brewery with a tasting room and event space where the Art Park and two former Albany Herald buildings now sit.
‘We really want to see a diverse mix of people in our downtown and really enjoying our downtown. I think this is that catalyst project,’ said Cutts.”
Read more here: http://www.walb.com/story/31189530/special-report-destination-downtown
Georgia Craft Beer Lawyer 