Thursday, June 4, 2009
Photo by James Trosh
As discussed on this site earlier, the Massachusetts Senate voted in favor of increasing taxes on wine at the point of sale from 0% to 6.25%. On the House side however, their proposed increase on sales tax (from 5% to 6.25%) did *not* include alcohol. This means that there's still hope to avoid this tax increase on alcohol.
Today, June 4th, 2009, those in opposition of additional increases in taxes on alcohol sales in Massachusetts will descend upon the State House to have their voices heard. The event is planned for noon. More information is available on the Massachusetts Package Stores Association web site.
According to the Association, a $9.99 bottle of wine already includes $2.90 of taxes built into the purchase. If this increase goes through, that bottle will now cost $10.62 of which $3.55 would go to taxes.
The Boston Globe recently showed their support for alcohol tax increase saying "IT NEVER made any sense that drinkers at Massachusetts restaurants pay a 5 percent tax on their beer and wine while someone buying a six-pack or a fine Pinot Noir at a package store does not." However, they seemed to realize their logic was faulty after a shrewd commenter "dotDude" pointed out that "With this logic, you could argue that it makes no sense that we pay 5 percent tax on our food in restaurants, while someone buying the same food in a grocery store does not!"
I particularly enjoyed the follow-on comment from "victimnation" saying "Bullseye !!! You sent this editorial into the dunk tank..." A tip of my cap to dotDude and victimnation.
The real issue here, in my mind, is that increasing taxes so disproportionately on alcohol is a sure way to penalize small business owners at the worst possible time. Further, the increases won't raise the revenue its backers are predicting because more people will cross over the border into neighboring states where taxes are lower.
Craig Drollet, Managing Partner at Bin Ends Wine in Braintree, MA offers this perspective:
"This decision and other similar issues call in to question whether 'Massachusetts is good for small business'. Adding 6.25% to every transaction and backwards shipping laws will eventually force us and others like us to look to friendlier states to operate our business. The timing could not be worse, many shops are already struggling to keep up and now we are encouraging shoppers to cross the borders to shop. We continue to put these people into office and then we run across the borders to shop when they do exactly what we knew they would do. It really does not make sense."
If you can't make it down to the State House to show your support, you can always contact your legislators. Don't know who your legislators are? A list can be found here.
I'll be discussing other legislative issues related to wine sales in Massachusetts in upcoming entries. Consider subscribing to The Wellesley Wine Press so you won't miss an update.
- So that heroin addicts can have a bed to sleep in?
- Wine tax increases also considered at the federal level from $0.21 to $0.70
- Visit Axe Taxes Not Jobs to find out more about how to have your voice heard