Proposed bill would turn liquor’s sin tax into a sales tax

If you have bought liquor in the past two years, you might have experienced sticker shock. A $12 bottle of vodka becomes $17.29.

In November of 2011, Washington voters went to the polls and approved the privatization of spirit sales in the state.

State Senator Jeanea Holmquist Newbry said we voted for privatization on the presumption of lower taxes and a relief of drastically high prices on booze.

“It’s very clear today that the voters have gotten anything but what they voted for, and now consumers and business are faced with taxes and fees on spirits that are more than five times the national average,” Newbry told KIRO Radio’s Jason Rantz.

A bill proposed by Newbry has a solution to our oppressive liquor levies. “It would bring down, gradually, over a period of eight years, our shocking 20.8 percent spirit sales tax to the state sales tax rate of 5 percent. So it’s going to bring that tax rate in line with what we pay for other goods in Washington.”

How would the state recoup the funds it would lose by losing liquors sin tax? It won’t need to, because Newbry said her bill is a moneymaker.

“In the bottom line, we’re now driving citizens to other states. Our citizens, especially the ones that live along the borders are leaving our state and not only buying their liquor, but buying other consumer goods. So we’re losing a lot of sales tax in that fashion and this bill is actually expected to help Washington businesses generate $80 million in new business sales annually once the tax rate reaches 6.5 percent.”

Even though the bill is aimed at keeping Washington consumers out of the welcoming arms of Oregon and Idaho, it is also a tax reduction.

State legislatures like taxes once they are in place and it can be hard to find support for such reductions in potential state revenue.

But Newby stands by her belief that a cheaper product means more money and she believes she has the votes to pass the bill onto the House.

“Yes, and I am getting support, but I think the bottom line is (that) this isn’t taking money away,” said Newbry. “We reduce the rate to 6.5 percent we will still, as a state, be taking more money into our coffers due to distilled spirit sales than we were prior to the privatization initiative.”