Legislature(2015 - 2016)
2016-01-19 Senate Journal
Full Journal pdf2016-01-19 Senate Journal Page 1595 SB 131 SENATE BILL NO. 131 BY THE SENATE 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 and Commerce and Finance Committees. The following fiscal information was published today: Fiscal Note No. 1, Department of Revenue Governor's transmittal letter dated January 15: Dear President Meyer: 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. 2016-01-19 Senate Journal Page 1596 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. 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 This amount is out of date, as many wholesalers require a surety bond much greater than that; at the same time very small brewers and distillers require a smaller surety bond.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