The Philly Thread

[Hooch]

City says Yuengling owes $6.6 million in taxes

WHEN Dick Yuengling bought a round of beers for more than 10,000 Philadelphians on National Drink Beer Day last year, he said "the city has truly shown our family business brotherly love, and we'd like to raise a glass to that."

Now, Dick Yuengling may be throwing back a few of his own brews after receiving a civil lawsuit from the city that claims his brewery, D.G. Yuengling and Son Inc., has failed to pay more than $6.6 million in city taxes, interest and penalty fees.

How does a Pottsville-based beer company that doesn't have a brewery or a plant in Philadelphia come to owe millions in business-income and -receipts taxes to the city?

It's not clear, because no one from the city would comment on the suit or explain even the basic foundation of the claims.

The business-income and -receipts tax (BIRT), formerly known as the business-privilege tax (BPT), can be levied on any person or corporation that engages in taxable activity within the city, even if that business is not in the city.

What the city constitutes as a taxable activity "is essentially a factual determination made on a case-by-case basis," according to the regulations listed on the city's website.

The civil suit against Yuengling was filed in Philadelphia last week and claims that America's oldest brewery failed to pay its business tax, though the suit does not detail what activities Yuengling conducted within Philadelphia that the city determined to be taxable.

Because Yuengling refused to allow the city's Revenue Department to audit its records from 2008 through 2011, the BIRT assessment was based "solely on the accounts payable list" of a Philadelphia beer distributor, the suit said.

That assessment amounted to $3,960,335, according to the suit. With an accrued interest of $963,126 and penalties of $1,710,830, the city is seeking $6.6 million from Yuengling.

The attorney who filed the suit for the city referred all questions to the Mayor's Office. Mayoral spokesman Mark McDonald declined to comment on the suit .

A spokeswoman for D.G. Yuengling did not return repeated requests for comment from the Daily News.