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Yeungling getting sued by Philadelphia?

Discussion in 'Mid-Atlantic' started by witness, Feb 5, 2013.

  1. emannths

    emannths Savant (445) Massachusetts Sep 21, 2007

    So, um, any thoughts at this point are probably premature. Either way, it's only $6.6M, half of which is penalties which would likely be waived in a settlement. Relatively speaking, it's pocket change.
  2. Maybe i am overreaching, but i would hate to see this happen to one of our smaller brewers who maybe can't afford a lawsuit like this. Will brewers pull out of the area because they are afraid to be taxed to death? I sure hope not.
  3. emannths

    emannths Savant (445) Massachusetts Sep 21, 2007

    FWIW, Yeungling is bigger than every craft brewery save BBC/Sam Adams. Even if they paid in full, which is very unlikely, it would cost less than $3/bbl. For comparison, the federal excise tax is about $18/bbl (note that Yeungling is subject to many more taxes, so the total per-bbl tax bill is higher). Like I said: pocket change.
  4. I'm not really a fan of the whole notion of "because you have the money, you can afford to hand over the money," ethos in this thread/(country).

    If the suit/complaint does not detail what activities Yuengling conducted within Philadelphia that the city determined to be taxable, a motion to dismiss/for summary judgment is probably going to be Yuengling's next step.

    A whole lot TBD in this story. . .
  5. epk

    epk Savant (370) New Jersey Jun 10, 2008

    I believe he meant other breweries who are smaller and may not be able to afford a costly lawsuit, not indicating that Yuengling is on the same level.
  6. joeebbs

    joeebbs Savant (360) Pennsylvania Apr 29, 2009

    Take it from me that after dealing with the Philadelphia Parking Authority that this is classic Philadelphia.

    "We won't say what you did wrong but you're guilty until you prove you're not."
    Beerandraiderfan likes this.
  7. It certainly encourages it. It definitely inhibits expansion. For all the talk about "the water" affecting the decision with New Belgium and Sierra Nevada's expansion into North Carolina, I think the taxation incentives (and disincentives from other East Coast states) were of greater concern.

    What state can save us shipping $$ by being close to the huge population centers of the northeast, but also avoid that geographical areas gigantic tax burden? North Carolina.
    CBlack85 likes this.
  8. Jimjohson

    Jimjohson Zealot (80) Georgia Dec 26, 2012

    If I was Yuengling I'd fight this all the way, spend 12 million just to keep them from collecting a cent. They're obviously trying to balance the budget via creative book keeping. They certainly have no case, or they would present it. They're hoping that Yungling will just roll over, thus creating a precedent. Then they will use that to go after anybody else they want. So call that bluff!
    Hatzilla likes this.
  9. spoons31

    spoons31 Aspirant (35) Washington Feb 8, 2012

    This really can't help but have the ring of extortion to it. That also has to be one of the broadest tax laws I've ever seen. It reads like literally anything could fall under it based on that quote from the website that has been put up.
  10. TomFoley

    TomFoley Savant (275) Pennsylvania Mar 19, 2005

  11. Kadonny

    Kadonny Advocate (705) Pennsylvania Sep 5, 2007 Beer Trader

    I know all about the Phila gross receipts tax and net income tax, been dealing with it for years. What I can't understand is exactly what the City is alleging. The supply chain is simple. Yuengling sells to a wholesaler. If that wholesaler delivers to Phila, then the wholesaler pays Phila gross receipts tax on their sales in the City and apportioned income tax based on those sales. Then the retailer/distributor in the City sells to the consumer and the retailer/distributor pays gross receipts tax and income tax to the City based on their sales. So in essence, the City is already collecting tax twice on the sale of any given beer if it is shipped and sold inside the City limits.

    The only possible scenario is if Yeungling sells to a wholesaler who is actually located inside the City. If that's the case, then the City may actually have an argument. Are there any wholesalers located in the City limits that receive shipments directly from the brewery?
  12. jesskidden

    jesskidden Champion (810) New Jersey Aug 10, 2005 Subscriber

    Origlio is Yuengling's wholesaler in the Phila. area, isn't it?
  13. dgs

    dgs Aficionado (195) Pennsylvania Jul 18, 2005

    Sorry... a little behind on beer news lately.

    "Yuengling ignored the tax notices, claiming it doesn't have to pay because its wholesalers, distributors and retailers that own businesses in Philadelphia already pay the tax on Yuengling sales. The city vigorously disagrees, and so in addition to the $4 million in back taxes he's been slapped with nearly $2.7 million in penalties and interest.
    "I think they're trying to make an example out of us," Yuengling said during a radio interview with AM 1210 WPHT earlier this week. "I can't believe they tax every pack of gum that comes into the city of Philadelphia."
    Oh Dick, believe it.
    In fact, the city assesses the exact same BIRT tax on all the other brewers that sell their suds in Philadelphia. To the best of my knowledge, the city hasn't had to sue them to get their money.
    Ah, but here's the rub. It's not so much that Dick, an outspoken small government conservative, disagrees with the taxes per se, it's that he won't cotton to the irresponsible way the the city spends those revenues -- you know, on things like firemen and cops and schools and garbage collection and streets and drinking water.
    "Government has spent more money than they have and they're just coming after everybody to try to tax them to recoup some of the inept spending that they've done," he said."