Sunday, March 19, 2017

Higher wine tax nixed, Montana governor widens his range

Never underestimate a politician when he or she wants to dig a little deeper into people's pockets. Take Steve Bullock as just the latest example.

He's the governor of Montana who last month experienced rejection by state Senate Taxation Committee members of his bid to increase the state's excise tax on wine. Undaunted, he came back on Friday with another such request -- but this time broadened it to cover beer and distilled spirits.

Chutzpah, yes, but here's the clever part. Consumers probably won't complain much if Bullock is successful because consumers don't directly pay such levies. While a state sales tax is collected from consumers as a percentage of the final purchase price of all qualifying sales, an excise tax is a flat per-unit tax paid directly to the government before the goods can be sold. Thus, it would be up to beverage producers to decide whether to pass along all or part of any  increase to their customers.

Early reaction is mixed. According to the Associated Press, the Montana Tavern Association was not opposed, but the Montana Beer and Wine Distributors Association called the tax selective and regressive.

If adopted, it is estimated 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. The tax on wine would rise from 27 to 30 cents per liter compared to doubling the tax which Bullock's original request would have done. The new beer tax would not be the same for all producers, ranging from would $1.43 per barrel for small operations to $4.73 for large ones.
• Go here to visit Dowd On Drinks
• Go here to visit Notes On Napkins
• Go here to visit the Capital Region Brew Trail

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