Tax commission recommends modification to small winery credit

The Tax Expenditure Review Commission voted July 25 to recommend that the Legislature modify the small winery credit, an alcoholic-beverage tax credit adopted in 2017 with an estimated annual revenue loss of about $100,000. Christian Larson of the Legislative Budget Office presented the evaluation noting mixed member survey responses and measurement limitations.

Senator Clark said she found the credit’s overall impact unclear and urged changes to ensure the credit supports Minnesota producers rather than out-of-state sellers. "If we're encouraging a Minnesota industry, I think that's a reasonable modification," she said, adding that quarterly rather than monthly filings could reduce administrative burden on small producers. Chair Davis moved the commission recommendation to modify the credit; the roll call recorded six ayes, one abstain (Hemmingsen Yeager) and two excused, and the motion passed.

The commission’s recommendation will be included in the LBO’s 2026 tax-expenditure report to the Legislature. The LBO materials noted member comments recommending either continuation, repeal or modification and left specific modification language to the tax committees. The commission did not set a sunset or specific statutory language; it directed the matter to the tax committees for further drafting and implementation.