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Starting July 1 next year, brewpubs across Pennsylvania will be made to pay a 6% sales tax on all receipts of products they manufacture.
Establishments will not need to collect this tax on products bought from another firm, in which case sales tax was already paid at the time of purchase.
However, brewery owners contend that the existing sales tax on non-manufactured products purchased by an establishment is a fraction of what the new sales tax on manufactured products entails.
Explained Jason Scott Bridge for Lehigh Valley Business Journal,
So if a bar is buying a $140 wholesale keg of beer from a distributor, it pays $8.40 in state sales tax.
The state brewers association wants similar treatment.
But the current state proposal asks the brewery to add 30 cents on each $5 pint sold. With each keg producing 120 pints, a taproom would be collecting sales taxes totaling $36, or about four times what bars and restaurants would pay on the same keg.
The Brewers of PA have an automated message of support that can be sent to legislators stating that,
The legislation ensures that the applicable tax rate will be on the wholesaler price and not the direct to consumer price, which will put us on even ground with other sellers of our products. Applying sales tax on the direct to consumer price, as originally directed by DoR, would be devastating to my business. If legislative action is not taken, DoR’s original directive will go into effect in the middle of next year. This clarification is needed to provide certainty and stability to the brewing community, and I hope you will support the Senate version of the bill to ensure this outcome.
Here is the tax bulletin released by the state’s Department of Revenue earlier this year.
LebTown reached out to Snitz Creek, Rotunda, and Mount Gretna Craft Brewery regarding this issue but has not heard back at the time of publication. We will update this post if we do.