The Pennsylvania Malt Beverage Tax Credit: What Brewers Need to Know

Updated: January 4, 2021

The Pennsylvania Department of Revenue is accepting applications for the Pennsylvania Malt Beverage Tax Credit program. The program is intended to offset the cost of investment for manufacturing expenditures of small brewers in the malt or brewed beverage industry.

Who Qualifies for the Pennsylvania Malt Beverage Tax Credit?

A taxpayer that is a manufacturer of malt or brewed beverages that has invested in qualified capital expenditures placed into service in Pennsylvania.

What Qualifies for the Credit?

Qualified capital expenditures placed into service in Pennsylvania between January 1, 2020 and December 31, 2020 can be claimed. The law also allows an applicant to claim qualified capital expenditures within one year of the original purchase as long as the expenditures were not claimed in another program year.

Qualifying capital expenditures include plant, machinery, or equipment for use by the taxpayer in Pennsylvania in the manufacture and sale of malt or brewed beverages.

What is the Benefit Received from the Credit?

The credit is applied towards the taxpayer’s Pennsylvania Malt Beverage excise tax liability. The credit is dollar for dollar on the qualified capital expenditures, not to exceed the maximum awarded credit of $200,000 per taxpayer per program year. However, the total tax credit for Pennsylvania to distribute in a calendar year is capped at $5,000,000. So if the total credits requested in a calendar year exceeds the cap, each applicant will receive a partial credit. 

How Do I Apply for the Pennsylvania Malt Beverage Tax Credit?

All applicants must submit the following information to the Pennsylvania Department of Revenue prior to the April 1, 2021 due date:

1. Completed Malt Beverage Tax Credit Program Application form.

2. Completed qualified expenditure schedule in electronic format.

3. Copies of complete invoices for all purchase transactions in the order they appear on the expenditure schedule with invoice copies hyperlinked using the invoice number. If only certain items on an invoice qualify, identify those specific items on the invoice.

4. Detailed description of each product not readily apparent; provide supporting documentation such as catalog cuts.

5. Detailed description of the process in which items were used, installed, repaired, maintained, etc.

6. Proof of delivery location for items placed into service in the brewery.

7. Proof of payment documentation for each transaction to verify the amount and date of payment/remittance.

The completed application and supporting documentation must be mailed to the Department of Revenue on a portable data storage device.

If you are looking to claim the credit but need assistance with completing the application and qualified expenditure schedule, please contact our Craft Beverage group.


About The Author

Matthew S. Fox, CPA is a Principal with Brown Schultz Sheridan & Fritz (BSSF) and a key member of the Firm’s Tax Department. He received his Bachelor of Science degree in Accounting from Pennsylvania State University. Matt has over 15 years of public accounting experience. He leads the Craft Beverage Group at BSSF, specializes in Research & Development (R&D) Tax Credit consulting and serves a variety of industries including craft beverage, insurance, construction, real estate, manufacturing and financial services.

Disclaimer: Information provided by Brown Schultz Sheridan & Fritz (BSSF) as part of this blog post is intended for reference and information only. As the information is designed solely to provide guidance and is not intended to be a substitute for someone seeking personalized professional advice based on specific factual situations, responding to such inquiries does NOT create a professional relationship between BSSF and the reader and should not be interpreted as such. Although BSSF has made every reasonable effort to ensure that the information provided is accurate, BSSF makes no warranties, expressed or implied, on the information provided. The reader accepts the information as is and assumes all responsibility for the use of such information.