Washington State Dems Drop Beer Tax

Washington State Dems Drop Beer Tax
April 24, 2013

Brew masters in Washington State are raising a cup to Olympia as House Democrats have decided to drop a proposed special tax on beer.

The House Finance committee did not include the beer tax proposal—which was 50 cents per gallon—in legislation it passed in May. The proposed taxes were part of a larger budget plan that includes ending sales tax exemptions and extending taxes that were set to expire in July.

But Washingtonians might want to hold off on popping the bubbly, budget critics say. Though lawmakers have backed off some of the plans for tax increases in the state, the largest chunk—extending a business and occupation tax surcharge on companies that provide services (such as doctors, lawyers, and architects)—is still alive.

‘Doing Tactical Retreat’

“It looks like they’re doing a tactical retreat on the most obvious and unfair taxes,” Washington Policy Center Vice President Paul Guppy said.

According to the Associated Press, the budget plan still includes roping in several million dollars via the business taxes.

The Washington Policy Center, a free market think tank, recently conducted an analysis with the help of the Beacon Hill Institute and found the tax plan would result in the loss of thousands of private sector jobs. Though not as many jobs would be lost now that the beer tax and other proposed taxes have been dropped, Guppy said the bulk of the problem is with the plan to extend taxes on businesses.

In 2010 the legislature enacted temporary sales taxes that were set to expire this July, including the tax for the aforementioned services. The Washington Senate, which is led by a coalition of 23 Republicans and two Democrats, has a different budget plan that includes no new taxes.

‘Contest of Wills’

“It’s a contest of wills,” Guppy said. “Who is going to be more adamant?”

So far Washington breweries are on the winning end.

That would be good news to Peter Charbonnier, owner of Populuxe Brewing in Seattle. His would have been one of 200 small breweries facing a new tax for the first time. They were exempt from the temporary sales tax set in 2010.

“I’d never be able to quit my day job,” he said, adding the small brewery just got up and running a few months ago. “We just wouldn’t be able to expand.”

Both the Senate and House budget plans have taken heat. The Columbian newspaper reports some skepticism over the numbers in the no-tax-increase Senate plan. And Gov. Jay Inslee received some pushback for unveiling budget highlights earlier this year that included tax increases.

Shelby Sebens (Shelby@NorthwestWatchdog.org) writes for NorthwestWatchdog.org, where this article first appeared. Used with permission.