The Taxation of Alcoholic Beverages in New York
- Oct 23, 2012 | Gail Cole
The taxation of alcoholic beverages in New York was the topic of a tax bulletin recently issued by the New York State Department of Taxation and Finance.
Tax Bulletin AB-25 defines "alcoholic beverage" as "beer, wine, and liquor." Beer is defined as "alcoholic beer, lager beer, ale, porter, and stout, and all other fermented beverages manufactured from malt wholly or in part, or from any substitute containing one-half of 1%, or more, of alcohol by volume."
Wine is defined as:
- "wine (still, sparkling, and wine fortified by the addition of alcohol or spirits) and fruit juice containing one-half of 1% or more alcohol by volume;
- all other beverages containing 24% or less alcohol by volume, manufactured or produced by the fermentation of the natural sugar contents of fruits or other agricultural products containing sugar; and
- cider containing more than 3.2% alcohol by volume."
Liquor is defined as:
- "distilled or rectified spirits, alcohol, brandy, cordials, (whether the base is wine or liquor);
- whiskey, rum, gin, and all other distilled beverages containing alcohol, including all dilutions and mixtures of these beverages; and
- wine containing more than 24% alcohol by volume."
Any registered distributor in New York is liable for tax on alcoholic beverages, as is an "individual who imports or causes to be imported beer, wine, or liquor into New York and is not a registered distributor." Tax returns for alcoholic beverages must be filed on or before the 20th of each month, even when there is no tax due. For a list of forms, please see New York Tax Bulletin AB-276.
New York State imposes an excise tax on the sale or use in New York State of beer, wine and liquor. New York City imposes an additional excise tax on the sale or use in New York City of beer and liquor containing more than 24% alcohol by volume. Amounts vary per type of alcohol, as seen in the chart below.
| Product | New York State Tax Rate | New York City Tax Rate |
|---|---|---|
| Beer and similar fermented malt beverages | $0.14 per gallon | $0.12 per gallon |
| Natural sparkling wine | $0.30 per gallon | None |
| Artificially carbonated sparkling wine | $0.30 per gallon | None |
| Still wine, including wine coolers | $0.30 per gallon | None |
| Liquor, alcohol, distilled or rectified spirits, and wine containing more than 24% alcohol by volume | $1.70 per liter | $0.264 per liter |
| Liquor containing more than 2% but not more than 24% alcohol by volume | $0.67 per liter | None |
| Liquor containing 2% or less alcohol by volume | $0.01 per liter | None |
| Cider | $0.0379 per gallon | None |
Sale here refers to "any transfer, exchange, or barter." Use here means "any compounding or mixing of alcoholic beverages with other ingredients (or other treatments) that renders them unfit or unsuitable for consumption of a beverage. Use also includes the actual consumption, or possession for consumption, of alcoholic beverages."
Tax Bulletin AB-245 allows the following exemptions for alcoholic beverages in New York. They include, but are not limited to:
- The United States government or its agencies or instrumentalities ... when the beverages are exclusively used for governmental functions or sold to authorized purchasers.
- Diplomatic missions and diplomatic personnel, when purchased for use, not resale.
- The United Nations, when for official use within U.N. facilities.
- A church, synagogue, or religious organization may purchase tax exempt wine for sacramental use only.
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