Maryland Legislature Considers New Layer of Alcohol TaxationMarch 23, 2011
ANNAPOLIS, MD – The Distilled Spirits Council testified today in opposition to Senate Bill 994, legislation to create a second sales tax for alcohol. The Council called the added levy an unfair burden on consumers and distilled spirits merchants whose products are already heavily taxed at 52 percent of the purchase price for an average bottle.
“Maryland consumers already pay a federal excise tax, a state excise tax and a state sales tax on all alcohol and now they are going to be asked to pay an additional sales tax,” Council Vice President Jay Hibbard told lawmakers in front of the Senate Budget and Taxation Committee. “We think the tax burden is high enough.”
SB 994 places an additional estimated $90 million tax burden on the state’s hospitality industry at a time when most businesses are just beginning to recover, Hibbard said. A recent economic analysis found the increased sales tax could cause Maryland retailers to lose an estimated $46 million in sales and put nearly 800 Maryland jobs at risk.
“One industry should not have to pay for the economic troubles of the entire state,” Hibbard said. “The principles of good taxation tell us the most efficient and equitable taxes are those that have the lowest rates possible, but are applied to the broadest base possible. This tax fails that test.”
Hibbard further noted that Maryland already has the fourth largest tax burden in the country according to the Tax Foundation.