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Department of Taxation and Finance

Alcoholic beverages tax

Video: Alcoholic Beverages Tax Web File Demonstration for Registered Distributors

Video: Alcoholic Beverages Tax Web File Demonstration for Registered Distributors

Video: Alcoholic Beverages Tax Web File Demonstration for Direct Wine Shippers

Video: Alcoholic Beverages Tax Web File Demonstration for Direct Wine Shippers

ABT Web File is available. If you’re a registered distributor, you can now Web File your ABT returns (Forms MT-456 and MT-456-ATT)—beginning with the return due January 20, 2021—through your Business Online Services account. It’s the fastest, easiest way to file.

New York State imposes an excise tax on the sale or use of:

In addition, New York City imposes an additional excise tax on the sale or use of:

  • beer, and
  • liquor and wine containing more than 24% alcohol by volume (ABV).

The state and city excise taxes are both administered and collected by the New York State Department of Taxation and Finance (Tax Department). Unless the context requires otherwise, any reference to the term tax or taxes refers to both the state and city excise taxes.

The tax applies to:

Before you begin producing, distributing or selling alcoholic beverages in New York State, you must complete a number of licensing and registration requirements with both the Tax Department, as well as the State Liquor Authority (SLA).

Who must register

All distributors of alcoholic beverages in New York State must be registered with the Tax Department for the alcoholic beverages tax (ABT). The term distributor includes anyone that imports alcohol into New York State or produces alcoholic beverages in New York State for sale or for any commercial purpose. In addition, the purchasing of warehouse receipts requires that you are registered for ABT. An out-of-state direct wine manufacturer in possession of a direct shipper’s license from the SLA that makes direct shipments of wine to New York State consumers must also register.

For more information, see Definitions.

If you import or cause to be imported beer, cider, wine, or liquor (other than small amounts; see Traveler’s exemption) into New York State for your personal use, you are responsible for paying New York State’s excise tax. See Importation for personal consumption.

Out-of-state wine manufacturers may obtain a direct shipper’s license from the SLA to make direct shipments of wine to New York State consumers from your out-of-state location(s). Prior to making any sales you must meet specific criteria contained in the Alcoholic Beverage Control Law (ABCL) and obtain a direct shipper’s license from the SLA.

Before making any sales to New York State residents, the direct shipper must:

  • register for New York State sales tax
  • obtain a direct shippers license from the SLA
  • register for New York State ABT

The direct shipper must consent to be subject to all New York State laws, including the Tax Law, and the state where the out-of-state winery is located must afford New York State wineries similar privileges to ship wine into that state. As a distributor of alcoholic beverages, the direct wine shipper must generally file returns and pay the alcoholic beverages tax on the quantity of product sold in New York State on a monthly basis. For information on filing requirements, see Filing returns and paying tax.

If you receive any alcoholic beverages from a distributor under circumstances where tax has not been paid because federal law prevents New York State from collecting it, and you later sell or use the product in any nonexempt manner, you are required to pay any New York State and New York City taxes on those alcoholic beverages.

In this situation, the Tax Department will not impose the registration and bonding requirements that apply to distributors of alcoholic beverages who sell or use alcoholic beverages unless you sell or use liquor for commercial purposes.

Information

Step 1: Register for your sales tax Certificate of Authority

You are required to be registered with the Tax Department for sales tax even if you are only producing alcoholic beverages that you intend to distribute to other wholesalers or retail locations. For additional information on sales tax registration see, TB-ST-360, How to Register for New York State Sales Tax.

Register

Step 2: Apply for your New York State liquor license

After you have applied for your Certificate of Authority, you can begin the application process for your license through the SLA; visit State Liquor Authority

Step 3: Register with New York State as a distributor of alcoholic beverages

 After you have applied for your license from the SLA you can file your application with New York State to register as a distributor of alcoholic beverages using: 

  • Form TP-215, Application for Registration as a Distributor of Alcoholic Beverages; and
  • Form TP-229, Financial Statement of Distributors of Alcoholic Beverages.

This application will be approved once you have a license issued by the SLA.

Step 4: Determine if you need to register as a Bottle Deposit Initiator

When you package your product in bottles, cans and crowlers for sale, you may be required to register with New York State as a Bottle Deposit Initiator to collect the five cent ($.05) deposit on every beverage container sold in New York State.

Surety bond or other type of security

We may require you to file a surety bond or other acceptable security to secure payment of any amount due under the ABT Law. We can impose this requirement any time we deem it necessary to ensure the timely collection of tax.

Canceling your registration

If you are no longer required to be registered with the Tax Department for ABT purposes, you must file a final ABT return and follow the instructions on the back of your certificate issued by the Tax Department to return it to us. You must contact the SLA directly with any questions regarding cancellation of your SLA license.

We can cancel your registration if:

  • you don’t file a required bond or security;
  • you fail to comply with the Tax Law and Regulations; or
  • your New York State liquor license is canceled for violating the ABCL.

If you are registered as a distributor of alcoholic beverages, you must file a tax return each month even if no tax is due.  You may be eligible to elect to file on a calendar-year basis. See Filing frequency.

You are required to pay excise tax on alcoholic beverages sold or used in New York State during the period covered by the tax return. Under certain circumstances, registered distributors can purchase alcoholic beverages from another registered distributor without payment of the ABT. See Interdistributor exemption.

It is important that you know what types of alcoholic beverages you are registered for with the Tax Department. Certain licenses issued by the SLA allow the licensee to produce or sell one or more alcoholic beverage products. If you indicate on your Form TP-215, Application for Registration as a Distributor of Alcoholic Beverages, that you will produce, sell, or distribute multiple types of alcoholic beverages you will be required to file a tax return and remit the ABT due for each type of alcoholic beverage. For example, those registered as a farm brewery are authorized by the SLA to produce both beer and cider; if you registered with us for both beer and cider, you must file and report both types of alcoholic beverages each reporting period even if you did not produce both products.

Individuals not required to be registered: If you import alcoholic beverages for personal consumption, you must file a tax return only for those months in which you import alcoholic beverages. This includes noncommercial importers of beer, cider, or wine, as well as individuals who hold a special license to import liquor into New York State for personal use. See Importation for personal consumption.

Filing frequency

For a monthly filing period, returns are due on or before the 20th day of the following month. For an annual filing period, returns are due on or before January 20th of the following calendar year. If the due date falls on a Saturday, Sunday, or legal holiday, the return is due on the next business day.

Monthly or annual tax return filing status

Generally, distributors of alcoholic beverages are required to file an ABT return monthly. Cider distributors must file annually on a calendar-year basis.  However, cider distributors that hold any other SLA license requiring monthly filing, must file a return and report all products, including cider, on a monthly basis.

Unless the following distributors of alcoholic beverages hold another license with the SLA for a product that requires filing on a monthly basis, they may elect to file annually on a calendar-year basis:

  • liquor or wine distributors licensed by the SLA as a farm winery, special farm winery, direct shipper, farm distillery, or farm meadery; and
  • beer distributors whose activities in New York State are limited to the production of beer and are licensed by the SLA as a farm brewery, microbrewery, restaurant brewer, or farm meadery.

Note: If a beer distributor conducts any other activities in New York State relating to alcoholic beverages, such as importing beer, the distributor does not qualify for annual filing.

If you are already registered as a distributor with the Tax Department, you can elect to file on an annual basis using Form MT-38, Application for Annual Filing Status for Certain Liquor, Beer, and Wine Manufacturers; otherwise you can make the election when applying to register as a distributor using Form TP-215, Application for Registration as a Distributor of Alcoholic Beverages, by marking an X in the box, Yes – I am eligible, and I elect to file my tax return on an annual basis rather than on a monthly basis.

Example 1: ABC Beer and Cider is licensed by the SLA as a farm brewery and as a cider producer.  Since both license types are eligible to file an ABT return annually, and it does not hold any other SLA license, ABC Beer and Cider may elect to file annually.

Example 2: XYZ Wine and Cider is licensed by the SLA as a winery and as a cider producer. Since the winery license requires an ABT return be filed on a monthly basis, XYZ Wine and Cider must file its tax return monthly and report its activity for both wine and cider.

Registered distributors

New filing options

Beginning with returns for the December 2020 monthly tax period, and the 2020 calendar year tax period, due on January 20, 2021, if you are a registered distributor, you can file ABT returns electronically through your online services account, or file the new consolidated ABT return, Form MT-456, Alcoholic Beverages Tax Return, and MT-456-ATT, New York City Taxable Liters of Liquor and Gallons of Beer.

You must have a Business Online Services account to file tax returns and remit the ABT.

  1. Log in to your Business Online Services account.
  2. Select the ≡ Services menu in the upper left-hand corner of your Account Summary homepage.
  3. Select Other taxes, then select Alcoholic beverages tax web file from the expanded menu.

For important payment information, see ACH debit block information.

For returns due for monthly tax periods prior to December 2020, and annual tax periods prior to 2020, see Alcoholic beverages tax forms - prior period forms.

If you are a registered distributor of alcoholic beverages and you don’t comply with the ABT rules, you may be subject to civil or criminal penalties for distributors. See Penalty Information for Registered Distributors of Alcoholic Beverages.

If you are an individual not required to be registered as a distributor of alcoholic beverages and you don’t comply with the ABT rules that apply to you, you may be subject to civil or criminal penalties for individuals. See Penalty Information for Individuals Who Are Not Registered Distributors of Alcoholic Beverages.

Definitions

Alcoholic beverages include beer, cider, liquor and wine.

Beer includes:
  • alcoholic beer
  • lager beer
  • ale
  • porter
  • stout
  • braggot, and
  • all other fermented beverages of any name or description manufactured from malt, wholly or in part, or from any substitute containing one-half of 1% (.005) or more ABV. 
    • Examples of malt beverages include hard soda, hard sparkling seltzers, and hard lemonade.
Cider includes:
  • partially or fully fermented juice of fresh, whole apples or other pome fruits, containing more than 3.2% but not more than 8.5% ABV: 
    • to which nothing has been added to increase the alcoholic content produced by natural fermentation, and 
    • with the usual cellar treatments and necessary additions to correct defects due to climate, saccharine levels, and seasonal conditions.
  • Cider containing 3.2% ABV or less is not subject to the ABT. Cider that exceeds 8.5% ABV, is treated as wine for New York State ABT purposes.
Liquor includes:
  • distilled or rectified spirits, alcohol, brandy, cordial (wine or liquor base), whiskey, rum, gin,
  • all other distilled beverages containing alcohol, including all dilutions and mixtures of one or more of the above,
  • wines exceeding 24% ABV.
Wine includes:
  • both still and sparkling wine (including those fortified by the addition of alcohol or spirits), and fruit juice containing one-half of 1% or more alcohol ABV,
  • mead,
  • all other beverages, containing alcohol, manufactured or produced by the fermentation of the natural sugar contents of fruits or other agricultural products containing sugar, provided they contain 24% or less ABV, but does not include cider containing 3.2% or less ABV.

Wine containing more than 24% ABV is taxed as liquor.

You are a distributor if you:

  • import (or cause to be imported) any alcoholic beverages other than liquor into New York State for sale or use for any commercial purpose;
  • import (or cause to be imported) liquor into New York State for sale or use in the state;
  • purchase warehouse receipts for liquor, beer, cider, or wine stored in a bonded warehouse located in New York State, then remove the liquor, beer, cider, or wine from the warehouse;
  • produce, distill, manufacture, brew, compound, mix, or ferment liquor, beer, cider, or wine in New York State for sale;
  • are an out-of-state wine manufacturer and have obtained a direct shipper’s license from the SLA to make direct shipments of wine to New York State consumers from your out-of-state location(s).

New York City

You are a distributor if you:

  • import (or cause to be imported) liquor or wine containing more than 24% ABV into New York City for sale or use for any purpose;
  • import (or cause to be imported) beer into New York City for sale or commercial use
    • sales in New York City include sales to purchasers whose licensed premises are located within New York City, and sales for delivery to purchasers located within the city.

Exceptions

You are not considered a distributor of alcoholic beverages if you only:

  • manufacture, compound, mix or ferment alcoholic beverages, and the ABT has already been paid on the beverages; or
  • mix or compound alcoholic beverages (and the ABT has already been paid on the beverages) with non-alcoholic ingredients for sale and immediate consumption on the premises.

A noncommercial importer is any person (other than a person who is a distributor of beer, cider, or wine or a person who qualifies for the traveler's exemption) who imports or causes to be imported beer, cider, or wine into New York State from another state for personal use.

The designation as a noncommercial importer does not apply to liquor and does not require registration.

An out-of-state direct wine shipper (DWS) is any out-of-state wine manufacturer licensed by the SLA as a direct shipper and registered with the New York State Tax Department for sales tax (Certificate of Authority) and as a distributor of alcoholic beverages. 

Person includes an individual, copartnership, limited liability company, society, association, corporation, joint stock company, and any combination of individuals. It also includes an executor, administrator, receiver, trustee or other fiduciary.

Sale means any transfer, exchange, or barter, in any manner or by any means whatsoever. Therefore, in addition to cash and credit sales, the giving of alcoholic beverages as samples, prizes, or gifts, and the exchanging of alcoholic beverages for any consideration other than money, are also considered sales. However, sales of warehouse receipts given upon the storage of alcoholic beverages are not considered sales of those beverages.

Use is any compounding or mixing of alcoholic beverages with other ingredients (or other treatments) that renders them unfit or unsuitable for consumption as a beverage. Use also includes the actual consumption or possession for consumption of alcoholic beverages.

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