Governor Wolf signed House Bill 542 into law on Monday, October 30, 2017. This legislation makes various changes and additions to the Pennsylvania Tax Reform Code of 1971.
One change that has a positive effect on breweries is that the bill explicitly expands the sales and use tax exemption for wrapping supplies to include kegs used to contain malt or brewed beverages. As a result, the purchase or use of wrapping supplies (kegs) by a person engaged in the business of selling personal property is entitled to an exemption from sales tax upon the person’s purchase or use of wrapping supplies (kegs) when the use is incidental to the delivery of property that is sold.
The kegs are also not subject to sales and use tax when they are returned and reused by the brewery to deliver product. Prior to the passage of this legislation, the Pennsylvania Department of Revenue’s interpretation was that the kegs were subject to sales and use tax when they were reused by the brewery to deliver product.
This change is effective October 30, 2017.
If you have any questions, please contact BSSF today!
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.