When Is a Tax Not a Tax?

    California Assemblyman Jim Beall of San Jose is seeking to raise his state’s alcohol excise tax, only he’s not calling it a tax.

     Instead, he’s labeling the increase — which would add 10 cents per drink of liquor, beer and wine, translating to about a dollar per 750-ml. bottle of wine at the retail level — as a “fee.” You’ve heard of “Two-Buck Chuck”? It would become “Three-Buck Chuck” under Beall’s plan.

     Why the scrutiny over language? Because a tax hike requires a two-thirds majority for approval; the implementation of a “fee” does not.

     Beall says the “fee” would generate about $1.4 billion in new revenue that would be earmarked for alcohol-related emergency medical and trauma care, treatment and recovery services, alcohol abuse prevention, and criminal enforcement programs.

     The revenue estimate is based on present sales levels — which might not be maintained if the price of liquor, beer and wine were to go up.

Posted in The Wine Business
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