Kansas: Liquor stores call Brownback’s proposed tax increase ‘devastating’
Liquor stores on the Kansas side of the state line say Gov. Sam Brownback’s plan to double the tax on liquor from 8 percent to 16 percent would be devastating.
Source: KC Star
BY HUNTER WOODALL
January 11th
Steve Faust said he wasn’t surprised when he heard about a proposal to raise the Kansas tax on liquor.
But that doesn’t mean the owner of MDL Wine and Spirits in Overland Park would like to see it happen.
On Wednesday, Gov. Sam Brownback’s administration proposed doubling a tax on liquor from 8 percent to 16 percent.
The tax is the state’s cut of the money customers pay for beer, wine and liquor at liquor store cash registers, farm wineries and microbreweries, according to the state.
The move – which officials estimate could bring in more than $100 million over two years – would play a part in mending the state’s projected budget shortfall of roughly $1 billion through fiscal year 2019.
Kansas Budget Director Shawn Sullivan said the liquor enforcement tax was last increased in 1983.
But whether that move actually becomes part of the budget is now up to lawmakers.
The proposal drew criticism from operators of several local liquor stores who worried it could drive customers across the state line into Missouri.
“If you pass this policy, certainly for liquor stores with proximity to the Missouri/Kansas border in this area, it would be massively detrimental,” Faust said.
Marshall Rimann, who runs two Rimann Liquors stores in the Kansas City area, said the tax jump would be devastating to retail liquor businesses in Kansas.
“It is a dramatic tax increase,” he said. “It’s a tax increase that directly affects the citizens, the people of the state. It’s coming straight out of their pocket.”
Brownback also proposed increasing taxes on cigarettes by $1 a pack and bumping taxes on tobacco products to 20 percent.
Sen. Minority Leader Anthony Hensley, a Topeka Democrat, said he was against targeted tax increases like those on tobacco and liquor.
The governor proposed a $1.50 increase on packs of cigarettes in 2015, but lawmakers only increased the tax by 50 cents, Sullivan said.
That same year, Brownbackhe also proposed boosting the taxes paid by consumers on beer, wine and liquor to 12 percent.
Sen. John Skubal, an Overland Park Republican, said he still wanted to see a repeal of the state’s LLC tax exemption for roughly 330,000 businesses.
But he added that he wasn’t going to “fall on the cross” for the proposed tax increases on tobacco and liquor.
“I don’t think it’s something that you have to have,” he said.