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Wednesday, January 16, 2008

Drinks & Taxes 2008 v1: South Dakota

The wholesale price of alcohol in South Dakota will jump under a proposal in the state Legislature. The bill would add $1.06 to the wholesale tax on a gallon of beer, $2.56 more per gallon to wine and $8.54 per gallon to liquor.

It all works out to 10 cents per drink advocates claim to cover programs ranging from police enforcement of drunk driving laws to grants for teen courts in South Dakota.

The push for the new tax is coming from counties around the state looking for new sources of funding without having to raise property or sale taxes. The bill needs a two-thirds majority in both the South Dakota House and Senate, which the tax promoters fear they will not get.

Now the counties plan to launch a petition drive to get the measure on a ballot for voters to decide. They say the $35 million is needed to fund programs. Those opposing the tax say the 387 percent increase in the state tax on beer is too much of a hike.

It will be interesting to see if voters in South Dakota decide to raise the price of a drink on themselves if the petition drive is successful. If South Dakota politicians won't raise the tax out of fear of facing voters in the next election, it's doubtful the same voters will go for a self-imposed tax.

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