Chamber Calls for Fairness in Craft Brewery Sales Tax Assessment
Pennsylvania’s craft breweries would have to pay six percent sales tax on every beer served at a tasting room or brew pub starting July 1 following a 2018 ruling by the PA Department of Revenue. This change comes after a 2012 interpretation that on-site beer sales were tax exempt. After hearing concerns from area craft breweries, the Chamber is calling for legislators to provide fairness with other bars and restaurants regarding the assessment of the tax (see the letter sent to local state legislators).
Most beer is currently taxed at the wholesale level. For example, if a craft brewery sells a keg or case to a local restaurant, the sales tax is assessed on the keg or case. However, under the 2018 Dept. of Revenue ruling, the brewery would have to collect the sales tax on every pint or bottle sold to a customer at its own tasting room or brew pub, resulting in significantly more tax being collected. This would put the brewer at a significant disadvantage in which a pint, bottle or growler of beer would potentially cost more at the place it was brewed than at a bar, restaurant or retail establishment down the street.
Therefore, the Chamber is supporting proposals that would also assess the sales tax for craft breweries at the wholesale level rather than the serving level.