Distilled Spirits Council Criticizes New Hospitality Tax

Tax Bill Would Hurt California Hospitality Sector and Destroy Jobs

Source: The Distilled Spirits Council

March 10, 2017

The Distilled Spirits Council today called on lawmakers to reject Assembly Bill 479, a proposal to increase taxes on spirits that would devastate restaurants and small businesses across the state of California.

“Exempting diapers and health products for women from sales tax is a laudable goal and one that has been successfully achieved in other states,” said Distilled Spirits Council Vice President Adam Smith. “However, shifting the tax burden onto the state’s already overtaxed hospitality sector is not sound public policy. The goal of helping women and families afford life’s necessities is important, but should be part of a larger over-all budget discussion. Simply tacking on another liquor tax will result in job losses throughout California restaurants, bars and hotels – including many much-needed jobs held by women.

“Spirits are already overtaxed in California with more than 50 percent of the price of a bottle of spirits going to a tax of some kind. Consumers respond to higher prices by making fewer purchases. That means less spending at restaurants and retail stores, less revenue for hospitality businesses and ultimately fewer jobs,” added Smith.

According to an economic analysis by the Council, the proposed tax would cause an estimated loss of retail revenue of nearly $170 million per year. As a result, nearly 2,400 workers would lose their jobs.

The Distilled Spirits Council is the national trade association representing producers and marketers of distilled spirits sold in the United States.