Grain Bulk Buy trouble in Southern Ontario

[SunyJim]

I'm part of the London Homebrewers Guild and the SOBs and we have received a notice from
G&P the local grain malter where we have been group buying our bulk grain. That they have been investigated, fined, and would no longer sell to anyone without a tax number.

"we have determined that we are potentially at odds with federal and provincial tax laws by selling directly to non-registered business entities. Effective immediately a new policy for selling to Home Brewing Groups. In order to continue to serve you we will need to hold your organization name and tax id on file." "We were audited last year and provided a fine. I am not doing this moving forward so we cannot legally sell to anyone that does not have a proper business #"

This of course is quite a pain for a club as small as ours. We could be a non-profit or a co-op but having just expanded from being a bunch of guys that meet in someone's garage that's quite a big step for us. G&P seem to been under fire for selling to clubs and individuals, have any other clubs out there heard from your local matler that they are also having this problem?

[Dee Envy]

The middle man strikes again.
It seems that your club should calculate how much is being saved per year and comparing that to the costs of registering a business Partnership or a non profit organization. I am not sure about the latter but to register a business and getting a current bank account then a tax number is not that expensive, although you will have to show a profit or they will shut you down after 5 years. Who knows, you may be able to acquire new memberships for a small fee to show an income, and the cheaper grains will be an incentive to join. Also you will be legally able to sell grains to the general public for cheaper than most retailers at a small profit.
The non-profit way may be better for your situation. I cannot give any details so someone with better knowledge of this may chime in.

[Mr_Tastyfish]

Never had that problem with UCML in Peterborough, and I buy as an individual. They've got my information on file, but I've got no business or group affiliation. I do think they believed me to be some sort of backwoods moonshiner when I payed in cash. Perhaps I'd better hope they don't get a visit from the tax man!

[Winger]

Cash is a good way to bypass the taxman.

[Reignman]

I find UCM in Peterborough's prices too high and I don't like their 2 row malt. I am in on the SOB malt buy every year and even with the drive to TO, I am still way ahead in savings.

[Reignman]

There is a lot of discussion about this on the SOB site. I am sure they will figure it all out, but I bet it will cost more money for a bag of malt. There are some companies in the US who stopped selling malt to groups all together. If we have to pay full price for malt, it would sure hurt my bottom line.

[ben58]

Try hooking up with John at Churchkey. Most of the micros don't mind a piggyback on their grain order.

[ECH]

That all really makes no sense. Grain is considered a food product, a cereal actually and there is no taxation on it.

At least I know when I buy a beer kit, grain, hops, anything natural from OBK that they don't charge me tax on those items, and pretty sure they aren't taking a loss on the taxes they aren't charging customers.

So why a brewing group/club would need to have a taxation number, in order to buy grain is just silly, as there is never any taxes that changes hands.

[Bodhi]

This might be worth looking into for you.
http://countrymaltgroup.com/homebrewers.asp

[Reignman]

I think the best way is to go through a LHBS who is willing to place an order for a few dozen pallets of grain. It sure would make things easier.