State excise rates going up

[grehorst]

I've just learned that our state legislators (Wisconsin) are planning to increase excise tax on spirits. In the current economic climate and with the increase in neo-prohibitionist attitudes, I fear it may get done quickly and with little time to organize resistance. I've considered approaching legislators with a compromise- asking them to freeze existing rates for small producers. Do any states currently have lower excise rates for small producers?

Happy Memorial Day to all!

[robertbirnecker]

Hey Guy,

Same problem here in IL!

It looks like it's going through.

Maybe you could give Sonat a call next week so we can send a letter to the Midwest state legislators?

All the best,

Robert

KOVAL Inc.

[stevenstone]

Washington State just increased the "markup" at the state stores. So, we are dealing with increased taxes here as well. And, no there was not a break for the small guys.

I've seen rumors of an increase at the Federal level. Can anyone confirm this?

[rich phillips]

We have been fighting these issues in Oregon as well. The legislators in their "Wisdom", levied a "Temporary" increase of $0.50 per bottle on the retail price across the board (It's amusing that it doesn't matter the size of the bottle: 50ml, 750ml or even 1.75ltr.). They also have called for a 30% reduction in inventories at the warehouse and liquor stores as well as a 25% reduction in the compensation to the owners of the stores. Many of them have retaliated by shortening the hours of operation, layoffs and the like.

We have approached the legislature several time as a guild and I don't think I should hold my breath for a better outcome...

[Odyssey Spirits]

Here's the confirmation for our folks in Illinois, direct from Discus

While here in Washington we might have thought we had it bad with the recent Stealth Tax, however Illinois just got slammed ~ which is a large market for our craft spirits. How do these Government legistlators think that adding such a tax will actually help the state earn more money? What happens when a bunch of the smaller restaurants can no longer produce enough income to stay afloat? (Smaller restaurants being the majority) - gone will be the licensing fees, state taxes, occupancy taxes, income taxes etc. etc. all for a "simple" little tax raise on the product that makes all those taxes possible to be collected

For Immediate Release - 5/21/2009

Contact: Public Affairs

Telephone: 202-682-8840

Proposed Tax Hike Would Cost 4,500 Hospitality Jobs Shocked

SPRINGFIELD, IL – The Illinois State Senate last night passed a spending package including a 90% increase in the state excise tax on alcohol, according to the Distilled Spirits Council of the United States which blasted the proposal as a job-killing tax on the hospitality industry at a time when the state is trying to attract global tourists.

“Hamstringing the hospitality industry with increased alcohol taxes will cost jobs and hurt tourism throughout the state – not to mention punish the very same businesses the state must lean on for a serious Olympic bid,” said Council Vice President Dale Szyndrowski. “This tax will actually make Chicago’s spirits tax rate 78% higher even than the rate in New York City,” he said, noting that such an increase will drive tourists and business travelers into nearby Wisconsin and Indiana.

Under an amendment to House Bill 255, the current excise tax on spirits in Illinois would increase from $4.50/gallon to $8.55/gallon – a 90% increase. The legislation passed the Senate last night and is currently under consideration in the House.

Szyndrowski stated that the Illinois hospitality industry is already struggling, citing over 18,700 hospitality jobs lost in the past year alone due to the recession. He pointed to an economic analysis which showed that the proposed tax increase would cause Illinois retailers to lose an estimated $225 million in retail sales and a loss of another 4,500 hospitality sector jobs across the state. The analysis also shows that in the year following the July 1999 tax increase ($2.00/gallon to $4.50/gallon) spirits volumes actually declined by approximately 13%.

“Policymakers need to understand that a tax on alcohol hurts the entire hospitality industry,” he said. “Forcing thousands of waiters, waitresses, bartenders and busboys into the unemployment line is no way to improve the state economy.”

[Sonja]

Illinois did in fact pass the tax increase described in that last posting, it takes effect September 1, 2009, a 90% increase on spirits, going to $8.55 per gallon. It's been interesting to see how little information there is out there in the press about this - there were lots of other taxes in there too, and many of those aren't getting that much attention either.

Also interesting is that beer only got a 25% increase, when wine and spirits got 90%. The beer lobby is very active here in Illinois, they spend far more money lobbying - and apparently that is working for them.

The big distributors are blanketing the market with low-priced products, and offering lots of deals, to help beat the increase's effective date (and meet their quotas). It'll be interesting to see how this shakes out over the coming months, but probably not in a good way.

If anyone wants the details, I wrote about it on my blog.