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NTU Urges Alabama Legislature to Reject Alcohol Tax Hikes

by Clark Packard / /

On behalf of National Taxpayers Union’s (NTU) Alabama members, I urge you to reject H.B. 75, sponsored by Rep. Dan Williams. If enacted, H.B. 75 would institute a five percent sales tax on liquor sold to wholesalers and retail establishments by the Alcoholic Beverage Control Board in Mobile County. Proponents estimate the bill would raise about $700,000 annually to help fund operations in the Mobile County District Attorney’s Office.

H.B. 75 is ill-considered for two major reasons. First, the proposed tax would be passed along to consumers through higher prices. With unemployment in Alabama persistently higher than the national average, and a relatively weak economy, many hardworking citizens cannot afford government adding to their tax bill.

Additionally, from a tax administration perspective, H.B. 75 would unnecessarily clutter the tax code. By creating a patchwork of state-imposed taxes applying differently across the Yellowhammer State, Alabama would set a bad precedent for future policy debates. Economists generally agree that the pillars of sound tax policy are fairness, simplicity, and transparency. Using those guideposts, H.B. 75 certainly fails on all three.

While NTU understands the need for swifter disposition of criminal cases pending in Mobile County, hiking taxes in a weak economy and creating a patchwork of alcohol sales taxes across the state is unwise. If legislators want to increase funding to the Mobile County District Attorney’s Office, they should do so with a direct appropriation, rather than through fiscal gimmickry. Accordingly, NTU strongly encourages you to defeat this complicated taxing scheme.

Sincerely,

Clark Packard
Policy and Government Affairs Manager