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Friday, January 30, 2009

Drinks & Taxes 2009 v3: Will Massachusetts Add a 5 Percent Tax on Alcohol?

Massachusetts appears to be ready to join a list of states prepared to boost alcohol taxes to pay for health programs.

A proposal is now kicking around the state house in Boston that would place an additional 5 percent sales tax on beer, wine and spirits sold in Massachusetts. Retailers are also worried about a plan to expand the bottle deposit law to include fruit juice and water. They say that would force them to expand recycling areas and cut into profits.

Massachusetts is an interesting case because it borders New Hampshire, which does not impose significant excise and sales taxes on alcohol. People living close to New Hampshire may just give their business to that state's liquor stores.

The chance of the tax not becoming law is pretty slim. After all, Massachusetts is facing a budget crisis and elected officials are playing two cards that have been used effectively in the past to push higher taxes on alcohol: They claim the money will go to support needed health programs and that the tax will cut the rate of underage drinking.

I want to meet the 19 year old college sophomore who decides he or she cannot afford that six pack of beer because the price just went up 30 cents.

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