Every state has different sales tax law, which makes it challenging as a brewery owner to ensure you are in compliance with the rules and regulations of each state. Adding to that, states view manufacturing sales tax in different ways. One of the ways that legislatures believe that they can help grow the economy is to lower taxes for manufacturers. So it’s quite common to exempt sales tax from the large equipment (brew house, tanks, etc.) that builds a brewery. While you are planning your brewery, check your local sales tax law to see if your equipment is taxable in your state. It could be exempt from tax or merely subject to a lower sales tax rate. In addition, most states exempt raw material and those items used to create beer. It’s easy to exempt malt and hops, but what about CO2, water and electricity? These things are consumed to make the final product and are often free from sales tax.
There were a whole lot of changes in the tax bill signed into law last December. Because of the new law, there are some wholesale changes for 2018. Breweries are not exempt from changes, the new tax bill affects many areas of brewery life. I’ve highlighted a few below.
1. The Definition of UNICAP (Uniform Capitalization) Has Changed
Lately, it seems that everyone is talking about the slowdown in craft beer. The areas open to new breweries are shrinking on a daily basis. The greater number of breweries in a given area, the harder it is to standout in the crowd. Taproom patrons are happy, but wholesale sales begin to stagnate. With the increasing number of choices, it is hard to maintain sales much less grow sales.
OBEER is a wonderfully complex engine that will propel your craft brewery to the next level. It requires focus and attention, but the rewards are well worth the effort. I often tell people that in order to get the most out of the software, you have to make sure that you are on a stable footing.
Taking the Fear Out of Brewery/Distillery Accounting
In my practice, I often see brewery owners who have a lot of questions regarding their books and accounting in general. They are uncertain about what makes their accounting system work and how to find the answers hidden in the financials. That is why some people shy away from accounting believing it to be “someone else’s problem.” I believe that mastering your financials is essential to gaining a true understanding of your business. You can’t steer a ship if you don’t understand how to navigate. That is why I partnered with Live Oak Bank to present a primer on financials and the accounting system in general.
I am pleased to annouce that Beverage Business Builders has joined the CBA (Craft Beer Attorney) list of prefered providers. Most of the providers are located in Southern California. Each and every member of the network has been personally vetted by Candace Moon and displays the same kind of committment to craft as I do. . There is everything from an insurance agent to branding experts. I am so impressed by Candace's committment to "craft" in the business space. Everyone has his or her pick of service providers in just about every niche of craft brewing. It is nice to work with people who care about the beer almost as much as the brewer does.