Montana: Bid launched to raise taxes on beer, wine and spirits

Source: Billings Gazette

BOBBY CAINA CALVAN

Mar 17, 2017

After failing to win support for an increased wine tax last month, the governor’s office returned to lawmakers on Friday to pitch a revenue-raising plan that would broaden the request to include beer and spirits.

It’s unclear how much more consumers would have to pay for a bottle of wine or a six-pack of beer because the tax would be charged on producers or retailers, not directly on consumers as a sales tax.

The bill heard Friday comes about a month after the Senate Taxation Committee dashed an earlier effort sought by Gov. Steve Bullock to raise taxes on wine to establish a revenue stream to bolster the state’s unrestricted spending account and pay for health and education programs included in his budget proposal.

“We heard out in the hall that the state is short of a couple bucks. We’re willing to pitch in and pick up our share of the tab,” said John Iverson, who represents the Montana Tavern Association.

However, most other alcohol industry and business groups stood against the new proposal, arguing that the tax would be a downer on business because of the possibility of higher prices.

Christy Blazer of the Montana Beer and Wine Distributors Association called the tax selective and regressive.

Andy Bixler, a lobbyist for the Montana Associated Students, suggested many of his group’s 40,000 members probably wouldn’t mind passing along some of their beer money to the state’s coffers.

The initial bill sought only to tax wine, but met fierce opposition from wine producers and retailers, who objected to being singled out.

As a result, Democrats regrouped and Sen. Lea Whitford of Browning, who carried the original proposal, offered a new bill that now includes beer and spirits, as well as wine.

If adopted, the tax would raise $3.8 million in its first year, with $2.7 million going to the state’s general fund and the rest going to Native American tribes and the state health department.

Under the proposal, the tax on wine would rise from 27 cents per liter to 30 cents – which is a much more modest boost than the doubling that had been initially proposed.

The new tax on beer would vary, depending on the size of the brewer, ranging from $1.43 per barrel for smaller operations to $4.73 for large ones. A barrel generally translates to about 250 pints of brew.