(The statements below are for entertainment purposes only and are not to be considered tax advise, Bull N Bear Brewery LLC is not a tax advisor and recommends speaking with a tax advisor before selling, purchasing, drinking or reading about any beer, wine or alcoholic spirit in the state of New Jersey)
This process is still on going. Filing all these documents and filling out these forms was ridiculous. Just tracking down all the information requested was hard enough in itself. Let alone actual figuring out what the cryptic form was asking for. I ended up hiring a lawyer to help me with this.
The information they requested was crazy! My mother's maiden middle name?! (I had to call and ask her) Not even all of my licensing in the finance industry did they ever ask that one. Addresses for the last 10 years, bank statements. Proof of the source of funding the brewery (I was tracking down bank statements and proof a money transfers going back almost 7 years ago. All just so I can sell beer (and be taxed for it).
Part of the reason it' so rigorous is because it's a generic background check from the ATF (Alcohol Tobacco and Firearms). This is the same background check for people who wish to sell guns so I can see it from that point of view. But still.... its just beer man!!
This process is going to take 6 months (at best) from when I first filed. Hence the long lead time on opening as I am not permitted to brew beer for sale until I am licensed and then I have to build up an inventory to sell.
So what licenses and permits am I acquiring you might ask? Well it depends on which level of government you are asking. Let's start at the top.
Federal Government: Alcohol & Tobacco Tax Bureau
According to these guys I am a "Brew Pub" not a Brewery, meaning I will also be serving beer at the production facility along with distributing off premises to other licensed businesses. I must keep a rigorous record of every ounce of beer produced (not sold) so Uncle Sam can put an additional tax on it. The going rate is $.02 per 12 oz can. It's not terrible since that was just recently halved by the 2017 tax bill but just wait. There is much more taxing to come. They had about 15 different forms and an "Information Letter". They were really interested in my background and the background of everyone I've ever met. Mostly to ensure where the money came from. I think its in an attempt to keep crooked money out of the industry. They were also very interested in the layout of the facility to make sure they know exactly where the taxed beer is located along with the all important soon to be taxed beer.
State Government: New Jersey Division of Alcoholic Beverage Control
NJ ABC Mission Statement:
"...to regulate and control the alcoholic beverage industry in order to foster moderation and responsibility in the use and consumption of alcoholic beverages, to protect the citizens of the State by assuring lawful, proper and fair trade practices, and to maintain the stability of the industry."
According to the Garden state I am a Limited Brewery not a Brew Pub because...... no one can agree on definitions. "Brew Pubs", as I think NJ sees it, have a liquor license and can can serve wine, spirits, and food and produce beer on premises for consumption or distribution. Limited Breweries can make beer. Basically that's all I can say for certain is that I can make beer. The rest of it; consumption on premises, entertainment, self distribution, seating arrangement, definition of "tour", security, etc. are either vague or currently being debated on and could change at any moment. So much for "maintaining stability". This is possibly why New Jersey has "maintained a stable" 47th in the US for gallons of craft beer brewed per adult (meanwhile Pennsylvania is 4th and Delaware is 2nd).
Currently the excise tax for the state of NJ is $0.12 per gallon so if we combine the.....wait a gallon doesn't divide evenly into 12 oz cans. (sigh) Oh and I'm selling 16oz pints not 12oz cans. Oh and this is when its produced (not sold) and by volume of beer (not the actual alcohol content of the beer which makes no sense from a "moderation and responsibility" perspective since this only incentivizes me to make really high alcohol content beer to save on the excise tax). There is NJ sales tax of 6.625% on my gross sales (not production volume). Payroll taxes, cause as an employer I have to pay a tax to pay my employees (who then pay taxes). Surge charge (tax) for additional waste water (that's county level technically), sales tax on ingredients and additional taxes on gas for the boiler. Oh, if I forget to pay or miscalculate one of these (or others I forgot to mention) I will pay a late fee (tax) on those taxes.
Then I can pay myself from the LLC (hopefully) which is recognized as regular income and I'm taxed at the regular income tax bracket level. But that's outside the scope of this blog (and just as long).
Local Government: Summit, NJ
Was a great experience. As my previous blog has said Summit has been amazing and is the main reason I ended up in the town. An ordinance was updated to include breweries in July of 2018, and the use was approved for the building I leased. Still ahead are the building permits and some fire code stuff. I'm probably forgetting some things about the local level but it's honestly because I didn't have to work on it for weeks and then stress about it for months. I'm sure I'll face some challenges at some point as nothing ever goes perfectly smoothly. (Oh and they get the property tax).
So that's it for now. All I can say is my the legal representation has been great holding my hand through this process. My list of legal specialist includes (so far)
Commercial Real Estate
BnB's LLC Brewers Permits
(CPA will be soon)
I think my next post will be a little lighter maybe on the upcoming Pipes of Christmas event that Bull N Bear is a sponsor of this year.
Owner and Founder