Legislative efforts to raise alcohol taxes at the state level have been
accelerating all over the country. Although they have generally been
unsuccessful, the sheer number of active legislative initiatives suggests
that the alcohol-tax issue has plenty of life and growing support.
Some of the prominent state battles are highlighted below.
Click on the state that you would
like to read about:
House Bill 6684 would have raised all alcohol taxes by 15 percent. On
April 21, the Joint Finance, Revenue, and Bonding Committee passed a tax
bill (S.B.1321) that incorporated elements of H.B.6684, but did not include
the alcohol tax increases.
House Bill 1120 made it through the House and received the
endorsement of the Senate Tax and Fiscal Policy Committee before having the
alcohol tax increase provisions eliminated by the full Senate. The
bill moved to Conference Committee, where it passed without alcohol tax
increases. Had the bill passed, the excise tax on beer would have
doubled, increasing from 12 to 23 cents/gal; the wine tax would have
increased by 25 percent, from 47 to 59 cents/gal; and the liquor tax would
have risen by 29 percent, from $2.68/gal to $3.35/gal.
On March 18, Gov. Ernie Fletcher signed
H.B.272 into law. This tax overhaul bill raises all alcohol
sales taxes -- beer, liquor, and wine -- from nine to eleven percent.
The tax is levied on wholesalers, and revenue from the tax is being used to
cut personal income taxes.
Gov. Kathleen Blanco had proposed increasing alcohol taxes as one means of
funding pay raises for the state’s poorly paid teachers. The governor
proposed raising taxes on tobacco, alcohol, and gambling, netting some $120
million in new revenue for the state.
Two alcohol tax increase bills went down to defeat early in the session. Later, on April 21, Sen. Jane Ranum, who heads the Senate Public Safety
Budget Division, introduced a public safety spending bill that would have
increased the excise tax on beer, wine, and liquor by one penny per drink.
The tax proposal failed to survive in the Senate Taxes Committee and was
removed from the bill on April 28.
House Bill 184 would have created the “Fund for the Reduction of Alcohol-Related
Problems and Underage Drinking.” The bill would increase the beer tax
from 6 to 24 cents/gal; liquor from $2 to $4/gal; and wine from 42 to 78
cents/gal. All new revenue from those taxes would be dedicated -- half
to prevention and the other half to treatment and law enforcement.
Impressively, the bill would have indexed the tax rates to future inflation.
Senate Bill 2372 created a “Responsible Choices Commission,” focusing on
alcohol prevention and treatment. The original proposal included a
provision to fund this commission with a beer tax increase, from 16 to 25
cents/gal. The tax increase was later stripped from the bill, which
will require the commission to raise its own funds.
House Bill 66 would have doubled the beer tax, from 18 to 36 cents/gal, and
the wine tax, from 30 to 60 cents/gal. The House approved it the
second week of April, but on May 24th, the Senate Finance Committee removed
the alcohol tax increases from the bill.
Senate Bill 1049 would have given counties the
right to add a fee of 10 cents to every can of beer sold in their county.
The fee would have been collected by the State of Oregon and placed in a new
Malt Beverage Cost Recovery Fee Fund, and then returned to the counties that
originally imposed the fee. Impressively, the fee would have been
indexed to inflation. Revenue from the fee would explicitly fund
alcohol prevention, enforcement, and treatment programs.
Senate Bill 127 would have raised the
distilled spirits excise tax from $3.93/gal to $15.36/gal; the wine excise
tax from 93 cents/gal to $4.39/gal; and the beer excise tax from 27
cents/gal to $1.28/gal. All proceeds would have gone to the law
enforcement and domestic violence funds.
Pennington County is collecting signatures for
a 2006 ballot initiative to add a 1 percent tax on the retail sale of all
alcohol. The tax would provide funds for county law enforcement
agencies, which do not receive any revenue from the state's alcohol taxes.
On May 3, the Senate Finance Committee recommended raising all alcohol taxes
by 25 percent. The Legislature is facing a court order to change the
way it funds its public education system, which currently relies on property
taxes. House Bill 3 included an amendment, which was later removed,
that would have raised alcohol taxes.
House Bill 2314, which was signed by the governor on May 17, raises the
state liquor tax from $2.44/liter to $3.77/liter. The state operating budget also
renews the 42 cents/liter liquor mark-up that was imposed two years ago.
Both tax increases took effect July 1.
In the state of beer and brats, Rep. Therese Berceau introduced a
bill that would increase the beer tax by 50 percent, from $2 to $3 per
31-gallon barrel. The tax would raise $4.7 million a year specifically
to pay for alcohol-abuse treatment. Although Wisconsin has the
second-lowest beer tax rate in the nation (after Wyoming), Berceau has
encountered major resistance to her bill, which would raise the price of a
six-pack by two cents. The bill is currently in the Assembly Committee
on State Affairs.
F or more information on alcohol
taxes, or to alert us of other tax initiatives, please
send us an email.
Updated November 3, 2005