Legislature(2001 - 2002)
05/02/2002 09:20 AM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 02, 2002
9:20 A.M.
TAPE HFC 02 - 101, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 9:20 A.M.
MEMBERS PRESENT
Representative Bill Williams, Co-Chair
Representative Eldon Mulder, Co-Chair
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Davies
Representative Richard Foster
Representative John Harris
Representative Bill Hudson
Representative Ken Lancaster
Representative Carl Moses
Representative Jim Whitaker
MEMBERS ABSENT
None
ALSO PRESENT
Representative Lisa Murkowski
SUMMARY
HB 225 An Act relating to municipal taxation of alcoholic
beverages and increasing the alcoholic beverage
tax rates.
CS HB 225 (FIN) was reported out of Committee with
a "do pass" recommendation and with a new fiscal
note by Department of Revenue.
HOUSE BILL NO. 225
An Act relating to municipal taxation of alcoholic
beverages and increasing the alcoholic beverage tax
rates.
Vice-Chair Bunde MOVED to RETURN to the table HB 225. There
being NO OBJECTION, it was so moved.
Vice-Chair Bunde MOVED to ADOPT the committee substitute
#22-LS0806\R, Kurtz, 5/01/02, as the working document before
the Committee. There being NO OBJECTION, it was adopted.
Representative Harris MOVED to AMEND the bill by adopting
Amendment #1, #22-LS0806\0.4, Kurtz, 5/2/02. The amendment
would phase the ten cents per drink in over a three-year
period. Co-Chair Williams OBJECTED.
REPRESENTATIVE LISA MURKOWSKI opposed the proposed
amendment. She noted that it would make the most sense to
implement the legislation and get the tax "in place" and not
have to work it through a three-year period. The adopted
committee substitute addresses stockpiling. Representative
Murkowski commented that she did not understand how the
transition provision would work if there were a three year
phase in.
Vice-Chair Bunde inquired if the costs to the Department of
Revenue would triple if the tax were put in place over a
three-year period.
Representative Murkowski explained the excise tax is
accessed at the bonding warehouse when the product leaves.
A simple process is used to increase the tax. At this time,
the tax on spirits is $5.60 a gallon and if HB 225 is
adopted, it would be $12.80 per gallon.
Representative Croft referenced the inventory floor tax. He
remembered that there was stockpiling happening when the
cigarette tax was passed. He asked if that would occur if
the amendment passed.
Representative Murkowski replied that she did not know how
that would work. If the increased tax was implemented on
the effective date, it is clear how the floor stock tax
would happen. When doing the inventory, that number would
be provided to the Department of Revenue. She did not know
how the tax would affect it and if the Department of Revenue
had considered that.
Vice-Chair Bunde commented that if there were a stockpiling
and a warehouse inventory tax, some warehouses would need to
go through that process three times, which would cost money.
Representative Murkowski agreed.
Representative Harris argued that for those distributors
that stockpile, that was the least of their concerns. Those
merchants would rather absorb any added costs rather than
what they anticipate they will loose with the sales to the
responsible drinkers. He emphasized that the merchants
would rather see the tax phased in. Representative Harris
added that it would not be absorbed at the wholesale level
and would be passed on to the consumer.
Representative Whitaker questioned the intent of the
amendment.
Representative Harris explained that it was his intent to
minimize the impact of the tax increase happening all at one
time and the amendment would provide for businesses and the
public to phase into the change.
Representative Whitaker recommended that the effect of the
phase should be determined and how it will affect each
drink. Representative Whitaker spoke against the amendment,
claiming that it would prolong the inevitable. The bill
creates a tax and someone must pay it sooner or later.
Vice-Chair Bunde asked Representative Moses if a tax to the
retailer would have a greater impact if implemented in one
year or in three years.
Representative Moses advised that it would not be that much
trouble to change the prices each year. He pointed out that
most businesses would increase their retail price.
Vice-Chair Bunde commented that was the intent of the tax,
however, he did not want to see the tax become more
burdensome for the retailers.
Representative Croft spoke to the phasing in question and
asked Representative Murkowski's thoughts on enacting the
proposal. He asked what position that would place Alaska in
relationship to the rest of the states.
Representative Murkowski explained that the price would be
ten cents per drink on beer, wine and spirits. That price
compared to other state's taxes where the average per drink
price is thirty cents, Alaska, at ten cents per drink, would
be well below the national average. She reiterated that
member's should keep in mind that Alaska does not have any
other State tax on alcohol.
Representative Murkowski spoke to Amendment #1. She stated
that it would appear that a phase in would assist the
wholesalers at the time that they have to pay the excise
tax. However, the net effect to the consuming public, who
ultimately pay the tax, would be less of a hit if the tax
were changed one time only.
A roll call vote was taken on the motion.
IN FAVOR: Foster, Harris, Moses, Bunde, Mulder,
Williams
OPPOSED: Lancaster, Whitaker, Croft, Davies
Representative Hudson was not present for the vote.
The MOTION PASSED (6-4).
Co-Chair Mulder MOVED to DELETE Section #3. Representative
Croft OBJECTED.
Co-Chair Mulder argued that section was punitive.
Representative Murkowski responded that Section #3 was
introduced at the request of the Department of Revenue as a
direct response to what they saw to the increase of tax.
She noted that the Department knows that there is already
stockpiling going on in anticipation of the legislation.
Representative Davies understood that when the tobacco tax
was implemented, it took about six months before sales came
back. Stockpiling did occur in most of the larger stores at
a disadvantage. Removing Section #3 would place the smaller
stores. He spoke against the amendment.
Representative Whitaker agreed with comments made by Co-
Chair Mulder that the language was punitive.
A roll call vote was taken on the motion.
IN FAVOR: Foster, Harris, Hudson, Lancaster, Moses,
Whitaker, Williams, Mulder
OPPOSED: Davies, Bunde, Croft
The MOTION PASSED (8-3).
Co-Chair Mulder MOVED to report CS HB 225 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note.
Representative Foster OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Croft, Davies, Harris, Hudson, Lancaster,
Moses, Whitaker, Bunde
OPPOSED: Foster, Mulder, Williams
The MOTION PASSED (8-3).
CS HB 225 (FIN) was reported out of Committee with a "do
pass" recommendation and with a new fiscal note by
Department of Revenue.
ADJOURNMENT
The meeting was adjourned at 9:48 A.M.
| Document Name | Date/Time | Subjects |
|---|