Starting for sales October 1, 2019, Pennsylvania breweries, taprooms (storage locations) and couplets (breweries with a Retail License or “GP License”) must collect a “use tax” on all of your direct sales to consumers, whether those sales are for on or off-premise consumption. This new tax replaces a more onerous tax which the Brewers of Pennsylvania successfully delayed. For most of the Commonwealth, the new tax will result in you reporting and paying 1½% of your retail sales to consumers to the Department of Revenue. Additional local taxes are due in Philadelphia and Allegheny Counties at the rate of 2% and 1% of 25% of the retail sale. The important points are as follows:
- You cannot pass this tax on to the consumer, i.e., while you are free to raise your price you cannot show this tax on your receipt to the consumer.
- The tax is applied by multiplying 25% of the total retail sale and, then, multiplied by your applicable local Sales Tax: 6% for most of the Commonwealth, 8% in Philadelphia, and 7% in Allegheny.
- All breweries are urged to read the attachments which are the official Tax Bulletin issued by the Department of Revenue, a draft of the Brewers of Pennsylvania and Department of Revenue collaborative FAQ which will soon be posted on the Department of Revenue website and a simple “how to” inputted on a Sales and Use Tax Form which you will be filing to report and pay this tax (it is the same form as you currently use with additional instructions in the margin).
If anyone has any questions, we urge you to participate in the BOP Member Legal Calls (BOP Brewery Members Only) with General Counsel. The next one is scheduled for Wednesday, December 4, 2019 at 10:00 AM (RSVP HERE) to note your participation.
