Massachusetts Voters Repeal Alcohol Sales Tax: What Happens Next?

Wednesday, November 3, 2010

Interactive map available on Boston.com
The initial returns didn't look promising, but on a night expected to be filled with tight races, one actually ended up being close.  By a 52%-48% margin, voters said "yes" to Massachusetts Question 1 which would repeal the sales tax on alcoholic beverages (full story from WBUR).  If enacted, this means that sales tax on beer, wine, and spirits will return to it's pre-2009 rate of 0% from its current rate of 6.25%.

I watched the returns closely all night and found them fascinating.  Looking at the map above, larger cities generally voted in favor of keeping the tax while smaller towns voted to repeal it.  Meanwhile, the eastern part of the state wanted to repeal the tax while the western part of the state wanted it maintained.  I'm still thinking about what exactly those trends imply in terms of public opinion but at the same time I'm looking forward to the future.

A few questions come to mind:
  1. When will the alcohol tax repeal take effect?
    When the tax went into effect last year it took one month from when Governor Patrick signed the bill into law and the tax started being collected.  Something tells me this will be like credit card charges: Applied almost instantly when it's a purchase but seemingly takes forever when it's a refund.
    You can bet retailers and consumers will be anxious to see this take effect, especially since we're entering the busiest time of the year.  I look forward to putting a sales-tax-free bottle of wine on our holiday table.
    Update: According to @CurtNickisch from WBUR the sales tax is set to be removed January 1st, 2011.
  2. Will the excise tax be increased?
    I suggested in this piece that if the intent of the alcohol sales tax was to discourage excessive consumption, the right thing to do is to increase the excise tax.  Whether that was indeed the intent is unclear, but we'll see if an excise tax increase comes along with the alcohol tax being repealed.
  3. Might the state legislature ignore the result and decide not to repeal the alcohol sales tax?
    I guess that's possible one way or another.  It wasn't like they asked our opinion when they put the tax in place last year.  We shall see, but I hope it's not like when courts decided earlier this year that wineries should be able to ship wine directly to Massachusetts consumer only to have the state legislature utterly fail to take the common sense action of passing a direct shipping model bill.
  4. If I live in another state, can I buy wine from Massachusetts tax-free online and have it shipped to my state?
    MA retailers can't legally ship out of the state so if you find a MA retailer who ships out of state they're probably doing so illegally.  That being the case I find it unlikely that they'd remit taxes to your state.  It's also illegal to import or export wine into the state so you can't technically come here and buy wine to take home.  Nobody has ever been formally cited for this act that I'm aware of, but just so you know. 
  5. What's going to happen to the behavioral health services the sales tax funded?
    I don't know.  During the campaign, there was disagreement on whether the alcohol sales tax exclusively funded these programs or whether the sales tax went into the general fund.  I never gained full clarity on how exactly these programs were funded prior to (and after) the alcohol sales tax was in place.  My guess would be it will revert back to its prior state of funding which I assume came from the general fund.
    Another thought: Since we have mandatory health insurance in Massachusetts might it make sense to include behavioral health services in the health insurance mandates?
Thanks to everyone who voted yes on this question.  And thanks to everyone who engaged in an enlightened discussion about the issues even if you came to a different conclusion than I did.  It was a complicated question and to be honest I'm surprised it passed.  The "no" vote enjoyed the equivalent of an incumbent's advantage because when people are confused by a question (and it was a confusing issue especially as stated on the ballot) the default response is to say "I'm not convinced: No."

Let's hope this is the beginning of a series of wine enthusiast-friendly changes in Massachusetts.  Pair this with freeing up some shipping laws and creating more competition at the distributor level and we could be on to something.  Let's hope!  Here's to buying some sales-tax-free wine in the near future.

Stay tuned for answers to these questions.  I'd love it if you subscribed so we can continue the conversation.

Learning how to help an alcoholic can be quite useful, especially when you have friends or loved ones who drink alcohol excessively.

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