There’s been a bit of press about the drive to repeal the sales tax on alcohol. Personally, I’m not crazy about paying an extra $1.25 on a case of Harpoon IPA. I have some questions (which I can’t find answers to on the state web site) and a suggestion.
Questions: What other taxes are there on alcohol in Mass? I kind of remember something about that going up about 15-20 years ago. I’d hate to be getting hammered (yes, pun intended) twice – some kind of state liquor tax + sales tax on top of that. (and, if so, is the liquor tax subject to the sales tax?) Why didn’t the legislature simply raise the current alcohol taxes modestly to have the same effect but avoid the visibility of the added 6.25% on every cash register receipt.
Suggestion: People are displeased about paying more. How about, to hopefully bring down prices even a minimal amount, get rid of the law where retailers must go through distributors and the law saying a company can have no more than 3 retail outlets. The deep-pocked (and heavy contributors to state legislators) distributors organizations have shot this down every time it has arisen. Seems now would be a good time to push for that.
The Massachusetts Dept of Revenue charges Mass brewers or local importers an excise tax (sin tax)on all alcohol entering the state. For beer, this Mass excise tax totals anywhere $.60 to $1.20 per case of beer by the time it reaches the shelf . The recent introduction of 6.25% sales tax on beer last year adds an additional $1.50 to your $24 case of craft beer. The problem with increasing the excise tax is that it gets marked up by each distribution tier (brewer, distributor, package store). So a modest excise tax increase by the state would yield a much larger increase to the consumer before it is (sales)taxed again at the register. The federal government also charges it’s own excise tax on beer (it is over 5 times what Mass charges)and gets marked up the same way through the system. These 3 different taxes make up over $7 of the cost of your case of beer.
I agree with JohnBowe and WarrenDibble1 when they write that the Massachusetts excise tax on alcohol is low. My search on the web finds it to be, per gallon, only $.11 for beer, $.55 for wine, and $4.05 for liquor. I hope someone will check those numbers.
If I buy a six pack of my favorite Harpoon UFO, a liter of wine, and a fifth of whiskey, say a $45 purchase, the beer is about 6.2 cents of excise tax, the wine 14 cents, and the whiskey 81 cents, for a total of $1.01. Not much of a sin tax for Massachusetts. Sales tax of 6-1/4 percent on that $45 is $2.81. I favor tax diversity, and I’ll vote No on One. If the proposition succeeds, it will be politically awkward, but I hope the legislature will update and increase the excise tax.
I’m voting no on one also.
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