Tax Considerations for Breweries Colorado is home to over 200 craft breweries, and is growing every day. With more than 10% of the nation’s craft breweries being found in Colorado, the state is becoming notoriously known for the impact it is having on the industry. As the industry continues to grow, more unique tax opportunities and challenges are becoming known. Whether you are crafting beers as a hobby or exquisitely perfecting your recipes to be sold in your brewery, don’t miss out on the tax advantages available or get stuck with a tax liability due to not knowing the ever-revolving tax issues. Tax Advantages for Breweries There are a few tax advantages for breweries that can be used to result in major tax savings if the proper planning …show more content…
This deduction is allowed if you are a manufacturing a product on U.S. soil and are paying wages. The qualified production activities include, but is not limited to, Cost of Goods Sold and paying wages to the production staff. This deduction often times can be very beneficial for the brewery owners. Whether you are testing out a new recipe or figuring out a method to better your brewing process, the Research and Development Credit is for you. As long as you are trying to better improve an existing process and meet four simple requirements, this credit allows you to deduct the expenditures for the tax year that they were paid or incurred. One area that is often overlooked while tax planning are the State and Local taxes. Did you know there is a state sales tax exemption for buying manufacturing equipment? Did you know that some cities follow the state guidelines, but some have created their own exemptions and deductions? With this being overlooked so often, make sure you are asking the right questions to your CPA to ensure you are doing everything possible to lower your tax