2016-01-19                     House Journal                      Page 1439
HB 248                                                                                                                        
HOUSE BILL NO. 248 by the House Rules Committee by request of                                                                   
the Governor, entitled:                                                                                                         
                                                                                                                                
     "An Act requiring the electronic submission of a tax return or                                                             
     report with the Department of Revenue; relating to the excise tax                                                          
     on alcoholic beverages; and providing for an effective date."                                                              
                                                                                                                                
was read the first time and referred to the Labor & Commerce and                                                                
Finance Committees.                                                                                                             
                                                                                                                                
The following fiscal note(s) apply:                                                                                             
                                                                                                                                
1.  Fiscal, Dept. of Revenue                                                                                                    
                                                                                                                                
The Governor's transmittal letter dated January 15, 2016, follows:                                                              
                                                                                                                                
"Dear Speaker Chenault:                                                                                                         
                                                                                                                                
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill relating to the excise tax on                                                            
alcoholic beverages.                                                                                                            
                                                                                                                                
The bill would increase the tax rates on alcoholic beverages under                                                              
AS 43.60 (excise tax on alcoholic beverages). Alcoholic beverage                                                                
excise taxes are levied on malt beverages, cider with at least 0.5                                                              
percent alcohol, wine, and other beverages with a higher alcohol                                                                
content. The bill would double the tax rates on a gallon or fraction of a                                                       
gallon. As a result, the excise tax on malt beverages or cider would be                                                         
$2.14 a gallon or fraction of a gallon; the tax on wine or other                                                                
beverages would be $5.00 a gallon or fraction of a gallon; and the tax                                                          
on beverages containing more than 21 percent alcohol by volume                                                                  
would be $25.60 a gallon.                                                                                                       
                                                                                                                                

2016-01-19                     House Journal                      Page 1440
The bill also would amend AS 43.60.040(a) related to surety bonds.                                                              
Current law requires a $25,000 surety bond before a license is issued.                                                          
This amount is out of date as many wholesalers require a surety bond                                                            
much greater than that; at the same time very small brewers and                                                                 
distillers require a smaller surety bond. The bill proposes to amend                                                            
AS 43.60.040(a) to delete the $25,000 bond and instead add language                                                             
that the surety bond amount would be determined by the department.                                                              
                                                                                                                                
This legislation would generate approximately $40,000,000 annually                                                              
in increased revenue, with half of that unrestricted general funds. The                                                         
alcoholic beverage tax rates have not been raised for many years. This                                                          
proposed increase is reasonable, especially considering the high                                                                
societal cost of alcoholic beverage consumption. The alcoholic                                                                  
beverage industry could continue to operate in this state but, under this                                                       
bill, would bear a fairer share of industry costs to the state.                                                                 
                                                                                                                                
To increase administrative efficiency for the Department of Revenue                                                             
and state taxpayers, the bill would require the electronic submission of                                                        
tax returns with an exemption available upon request.                                                                           
                                                                                                                                
The bill is an integral component of the New Sustainable Alaska Plan                                                            
to provide a balanced and sustainable budget for Alaska's long-term                                                             
fiscal stability.                                                                                                               
                                                                                                                                
I urge your prompt and favorable action on this measure.                                                                        
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Bill Walker                                                                                                                     
Governor"