Ways and Means hears alcohol tax plan
Delegates this morning quizzed senate sponsors of the proposed alcohol tax about whether the three year phase in period could be deleted and the entire hike could be implemented in a single year. The committee has not yet voted on the bill.
The Senate-passed version of the measure bumps up the state sales tax on alcohol from 6 percent to 9 percent over three years. Senators want to use the revenues in the first year to fund health care for the developmentally disabled and provide a one-time grant to schools in Baltimore and Prince George's County.
The proceeds are not required to balance the budget.
Del. Joline Ivey, a Democrat from Prince George's County, noted that the "psychological impact" of raising the tax over three years might cause fatigue. "Post all of it at once," she said. Ivey said that the phased-in approach could be problematic to retailers who would have to recalibrate their cash registers three years in a row to accommodate the slowly rising tax.
Sen. Richard Madaleno, a sponsor on the tax, noted that there isn't a lot of time left to make wholesale changes to the bill. "It is a little late in session to go a different direction," Madaleno said. "There are 96 hours left."
Lobbyists from Maryland's liquor industry, who initially held their tongues on the legislation, are now opposing it because of the expected loss in alcohol sales. A legislative analysis estimated that there would be an 8 percent reduction in the purchase of spirits, three percent reduction in wine sales and a 3 percent reduction in beer sales.
Comments
Looks like I'll be by-passing my local liquor store and driving to VA or DE for booze. Maybe it will kick start NASCAR in Maryland as we're all trying to out run the revenuers.
Posted by: GregBWorking | April 8, 2011 12:40 PM
Is there any tax that has not been raised since O'Malley took office?
Posted by: Charlie | April 8, 2011 1:11 PM
This is an outrage. The burden place on illegal aliens by this tax increase isn't fair. Illegal aliens and their children should be exempt. If they can't show documentation that they are in this country legally the tax should be waived.
Posted by: Skippy | April 8, 2011 1:43 PM
From the post:
"The Restaurant Association of Maryland opposes the bill now, arguing that reprogramming cash registers to accommodate rate increases could cost anywhere from "$300 to several thousand dollars.""
That's hogwash. The cash register programming software should offer a menu that anyone with a 3rd grade education should be able to change a 6 to a 9.
Posted by: Cham | April 8, 2011 2:05 PM
Will "Independence" card balances increase to cover the extra hardship? Just another tax on the poor...:-)
Posted by: G-man | April 8, 2011 2:36 PM
Delaware beer distributors just got a whole lot closer!
Posted by: Ben | April 8, 2011 4:26 PM
In response to the posting by Cham:
Our arguments about the cost of compliance come from conversations with our members and with point-of-sale system (POS) vendors. The issue here is that this legislation requires restaurants to apply different sales tax rates by product type (food vs. alcohol). That makes reprogramming equipment a little more complicated than changing a tax rate for all sales. Larger chain restaurants with very sophisticated POS systems may be able to make such changes easily. However, many smaller independently-owned establishments with less sophisticated POS systems will have to place a service call to their vendor, select an available service date and pay a service fee for such reprogramming. Restaurants with older POS equipment, we are told by POS vendors, may need to spend several thousand dollars to upgrade their hardware to a more sophisticated POS system that can handle multiple tax rates. If such legislation passes and is signed into law, it is unclear if restaurants and POS vendors can make the required changes/upgrades by the July 1st compliance date.
Before dismissing our arguments as "hogwash," please learn a little more about the legislation, POS systems, our industry and the way it operates.
Posted by: Melvin Thompson - Restaurant Association of Maryland | April 8, 2011 5:37 PM
Why should PG and Baltimore get even more money? We have a formula for handing out state education funds with a major component of the formula being the number of students. If a school district loses students, it loses funds---which is what has happened in PG and Baltimore. In Montgomery, it's just the opposite. We are gaining students, therefore the formula gives us more state funding. Simple as that.
This is really just a payoff to the teachers unions in those two jurisdictions for their strong support in the last election. Since 90% of school expenditures go to teacher salaries and benefits, extra funding will have virtually no benefit for students. But since teachers are required to belong to a union, a portion of the funding will wind up in union coffers.
ALL of the extra revenue from this tax should go to the Developmental Disabilities Administration.
Posted by: MrBethesda | April 8, 2011 11:14 PM
Well democrat lost my vote from now on
Posted by: m | April 10, 2011 1:02 PM