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An Open Letter to the Washington State Legislature: Lighten the Heaviest Liquor Tax Burden in the Nation!
March 6, 2014
On behalf of National Taxpayers Union’s 362,000 members nationwide and our 10,800 members in the Evergreen State, I urge you to support Senate Bill 6547, which would eliminate spirits sales taxes by 2021. Doing so would benefit consumers and businesses throughout the state, as taxpayers would be less likely to cross state lines to purchase liquor.
The adoption of I-1183 was a historic moment for Washington, as it ended a nearly 80-year, prohibition-era, government reign over state liquor sales. In fact, Washington became the first of the 18 liquor monopoly states to completely privatize the sale of the product. Unfortunately, privatization came at a steep cost, as new “fees” were layered on top of already-too-high taxes. Today, this expensive mix includes excise taxes, spirits sales taxes, and special privatization “fees,” resulting in the highest liquor tax burden in the nation, according to the Tax Foundation. By eliminating the spirit sales tax component over the next six years, Senate Bill 6547 would be a step in the right direction and would allow taxpayers and businesses to begin to more fully enjoy the benefits of privatized liquor sales.
It’s no secret that Washington’s soaring liquor prices have led to a rise in cross-border shopping. For example, liquor sales have recently skyrocketed in Idaho border towns Moscow and Post Falls, according to the director of the Idaho State Liquor Division. Additionally, Oregon, California, and even British Columbia have all reaped the windfalls of increased sales to Washington consumers looking to save on liquor. Obviously, Evergreen State businesses of all types could benefit from lower rates, especially since shoppers are likely to make purchases other than liquor when crossing state lines—including gas and groceries. The current spirits sales taxes hurt Washington businesses of all sizes, as well as your state’s coffers.
For now, consumers not making out-of-state visits to stock up on liquor are stuck paying the most discriminatory liquor tax burden in the country. Instead of heaping ever-heavier loads on taxpayers who are already struggling in this sluggish economy, lawmakers should support Senate Bill 6547 and its sensible aim to eliminate spirit sales taxes by 2021. Combined with I-1183, this bill would make Washington a leader amongst states, to the advantage of businesses and consumers alike.
Sincerely,Lee SchalkState Government Affairs Manager