Memo from General Counsel • November 15, 2024

Guidance Regarding Taxes on RTDCs Sold by PA Manufacturers

MESSAGE FROM GENERAL COUNSEL OF THE PENNSYLVANIA DISTILLERS GUILD (PADG)

To: Pennsylvania Distillers Guild – Leadership and Member Distillers

From: Anthony M. Brichta, Esq., General Counsel

Date: November 15, 2024

When Act 86 of 2024 was passed in July, the PADG was able to successfully advocate for the preservation of the right of Pennsylvania licensed distilleries to sell Ready to Drink Cocktail (“RTDC”) products directly to RTDC Permit Holders such as distributors and restaurant licensees. As is often the case with new statutes, there was some uncertainty regarding certain provisions of the new law. One such issue was that Act 86 did not explicitly provide for whether taxes must be paid when a Pennsylvania manufacturer sells an RTDC to a RTDC Permit Holder. The statute explicitly provides that RTDC Permit Holders must pay sales tax when buying from the PLCB and can seek a credit for those taxes paid, but was silent as to sales from PA Manufacturers. Fortunately, the Department of Revenue has now issued definitive guidance.