Legislature(2015 - 2016)BARNES 124
02/12/2016 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB248 | |
| HB252 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 194 | TELECONFERENCED | |
| += | HB 248 | TELECONFERENCED | |
| += | HB 252 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 248-ELECTRONIC TAX RETURNS & ALCOHOL TAX
3:26:39 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 248, "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."
3:27:04 PM
DALE FOX, President/CEO, Alaska Cabaret, Hotel, Restaurant and
Retailers Association (CHARR), informed the committee Alaska has
the highest alcohol taxes in the nation; in fact, Alaskans pay
the highest taxes on wine and the second highest on beer and
spirits. Currently, the excise tax on spirits is $12.80 and the
proposal to double that will put the tax at $25.60, however, the
national average $4.45, and $25.60 is five point seven times the
national average. The excise tax on wine is currently $2.50,
doubling that will put the tax at $5.00; the national average is
$0.83, and $5 is six times the national average. The excise tax
on beer is $1.07, doubling that will put the tax at $2.14; the
national average is $0.28, and $2.14 is seven point six times
the national average. Mr. Fox said the issues related to HB 248
are equity and unintended consequences. One example of an
unintended consequence is that the discrepancy in price between
the cost of alcohol in Alaska and Outside makes it possible to
skip the $5 per gallon tax on wine in Alaska, and ship wine from
California where the tax is $0.20 per gallon, saving enough
money to pay shipping costs. The same is true with spirits,
where the tax in Kentucky is $1.92. Mr. Fox said high taxes in
Alaska will make residents buy off the Internet, as they do with
so many other products. Although beer is heavy, with Oregon
taxes at $0.08 per gallon, the same thing can happen with beer.
He suggested that residents could buy beer in Oregon, whiskey in
Kentucky and wine in California, skipping the Alaska taxes, and
local distributors and retailers. Mr. Fox stressed that
Alaskans should not pay seven times the national average, and
urged legislators to defeat the bill.
3:31:20 PM
DIANE THOMPSON, President, Alaska Hospitality Retailers, said
her association is a coalition of restaurants, hotels,
retailers, and coffee shops and is not a liquor lobby, although
many of its venues sell liquor as part of their services to
their customers. She is a co-owner of Fire Tap in Anchorage and
is opposed to the proposed increase in liquor taxes. Ms.
Thompson agreed that the government needs more money and
suggested implementation of a general sales tax, thus liquor
taxes would "pay their part, but would not be singled out." She
referred to materials provided in the committee packet that show
liquor taxes in Alaska to be higher than those in the rest of
the nation. An article provided from the [Anchorage Daily News,
dated 9/15/13] shows that liquor sales did not decline because
of increased taxation. She said there is testimony that
increased liquor taxes are needed to provide treatment for
alcohol abuse, and this concept is not a problem for the
industry; however, currently, taxes are not being used to do so.
Ms. Thompson recalled that a $4 million appropriation to deal
with chronic inebriates in Anchorage was changed by the
Department of Health and Social Services "into a homeless
program, and now a year-and-a-half, two years later, not a
dollar ... of it has been spent on alcohol treatment ...." She
concluded that her association believes there should be a focus
on general tax measures, such as a sales tax that could provide
more revenue, and that the industry supports the work of the
legislature to balance Alaska's budget and prevent another
recession.
3:34:27 PM
RYAN MAKINSTER, Executive Director, Brewers Guild of Alaska,
said he agreed with the two previous speakers and added that
last year the craft beer industry in Alaska provided
approximately 965 direct jobs, with a full-time equivalent job
impact of approximately 1,700 positions. The craft brew
industry in Alaska is responsible for a total economic impact of
$454 million, and currently pays almost $30 million in state and
local taxes and fees, including multiple licensing and
distilling fees. Total instate expenditures that his members
pay to other Alaska businesses is approximately $150 million.
Mr. Makinster clarified that his member breweries fall under the
exemption in HB 248 and in previous related legislation, and
thus currently pay $0.35 per gallon, and the increase in HB 248
would mean the breweries will pay over twice the national
average. He further explained that the exemption applies to all
craft breweries producing under a certain amount and all of the
guild members fall under that limit. The growing craft brewery
industry is important to the state and local communities; in
fact, in other states the industry has attracted new residents
of the younger generation. Although craft breweries inside and
outside the state would be affected by the tax increase, local
breweries must pay to ship in their supplies such as glass,
cans, and hops - which are not available locally - in addition
to the higher tax. Because of this, the higher tax is a bigger
issue for guild members. Craft breweries' products are priced
higher than others and the experience in other states is that
reaching a certain price level "prices" people out of the local
market. Finally, Mr. Makinster noted that the state has worked
to promote his industry because it is an economic driver and an
expanding manufacturing industry, thus it is counterproductive
to double taxes on an industry that the state seeks to promote.
3:39:46 PM
CHAIR OLSON announced that public testimony would remain open.
[HB 248 was held over.]