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Senator Pushes To Eliminate Sales Tax On Beer, Wine & Liquor

by Christine Stuart | Feb 10, 2014 6:30am
(10) Comments | Commenting has expired
Posted to: Business, Local Politics, Taxes, State Capitol

CTNJ file photo

Sen. Kevin Witkos

Sen. Kevin Witkos, R-Canton, doesn’t believe proposing legislation that eliminates the sales tax on beer, wine, and liquor is a conflict of interest for him, despite being a tavern owner.

Witkos is proprietor of Wilson’s Pub in Collinsville with his wife, Esther. He said the legislation he’s proposing would only impact sales tax charged at grocery and package stores. He said the new legislation would have no impact on the sales tax charged by restaurants and bars.

“It’s not applicable to my business,” Witkos said Sunday in a phone interview.

Also, instead of introducing it as a General Law Committee bill where he’s the ranking Republican member, he made sure it was introduced as a Finance Committee bill.

“In order to make sure there were no improprieties, I made it a Finance Committee bill,” Witkos said Sunday.

The General Law Committee has jurisdiction over the state’s liquor laws. The Finance Committee deals with taxes.

Witkos said the six-week pilot program to exempt the sales tax would be revenue neutral because alcohol sales would increase and the revenue would be made up by the additional excise tax. Or at least that’s what he hopes will happen.

The one-sentence legislation doesn’t specifically spell out where in the process the sales tax exemption would apply. It says, “That the general statutes be amended to provide a pilot program allowing an exemption from sales tax on beer, wine and liquor from November 15, 2014, through December 31, 2014, to determine if such an exemption leads to an increase in consumer purchases.”

Witkos admits it would be an experiment, but he said it’s worth the risk.

He said Rhode Island just repealed its alcohol sales tax and it’s been a few years since Massachusetts repealed its sales tax on alcohol.

“If it’s within a 20-minute drive, Connecticut residents are still driving over the border to get their liquor, cigarettes, and gas,” Witkos said.

Witkos’ proposal comes on the heels of the state’s decision to allow package and grocery stores to sell beer, wine, and liquor on Sundays.

According to the latest report from the Department of Revenue Services, beer, wine, and liquor sales are down by about $3.05 million in 2013 when compared with 2012, a year in which there were only about six months of Sunday sales.

Sunday sales were estimated to bring in an additional $5.3 million a year for the state when it was passed back in May 2012.

While Gov. Dannel P. Malloy felt allowing Sunday sales was a step in the right direction, he felt the state should be doing much more to lower the price of alcohol within its borders.

But last year, the General Law Committee squashed a proposal by Malloy to change how alcohol is priced.

Currently, the minimum price a package store can charge for a bottle of alcohol is a wholesaler-established-and-posted “bottle price.” In Connecticut, this keeps alcohol prices at smaller liquor stores in line with larger stores, who would otherwise be able to sell at wholesale discounts.

The governor has argued that the law causes consumers to pay more for alcohol in Connecticut than in surrounding states.

Revenue Services Commissioner Kevin Sullivan stated at a public hearing last February that the administration wants to address minimum pricing before it makes changes to the state’s alcohol tax rates. He said the fixed price was a subsidy to the alcohol market, which passes those higher prices onto consumers.

“I’m not going to sit here and tell you that taxes are not a factor,” he said.

Sullivan was a member of a task force that studied liquor pricing two years ago. He said everyone in that group would acknowledge that taxes play a role in the high price of liquor.

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(10) Comments

posted by: Not that Michael Brown | February 10, 2014  8:36am

Enlightened self interest?

posted by: art vandelay | February 10, 2014  8:52am

art vandelay

I think its a fantastic idea and long overdue.
Massachusetts does not charge sales tax on liquor purchased at a Package Store. New Hampshire liquor outlets are controlled by the state putting Connecticut at a severe disadvantage. The parking lot at Yankee Liquors in Sturbridge is consistently full with cars registered in Connecticut.  The only measure resolved during hearings on this matter a few years back was to allow package store owners to open on Sunday.  NOTHING was done about pricing and competing with neighboring states.

posted by: art vandelay | February 10, 2014  8:59am

art vandelay

A few years ago the Massachusetts state Legislature initiated a sales tax on liquor. Citizens were in an uproar.  Since Massachusetts has Initiative, Referendum, & Recall, the tax was imitatively rescinded.  It’s a pleasure going into a place like Yankee Sprits in Sturbridge, finding huge discounts on liquor and not having to pay sales tax.  The local gas station also sells gas 10¢ a gallon cheaper so its smart to fill up too.

posted by: Joebigjoe | February 10, 2014  9:27am

I dont drink much although I should living in this state.

I think it’s a great idea.

Speaking of another great idea when I get my 55 dollars back from the state, half of it is going to Witkos and the other half to CCDL.

I think that will create 3000 somewhat temporary permanent jobs for new homeowners or something like that.

posted by: dano860 | February 10, 2014  10:20am

For those of us that don’t drink or smoke it is sort of a mute point. Although it raises the question of, “Where will the make up revenue come from?”
This session I believe they are also going to entertain recapturing the loss of revenue due to the reduction in gas sales. The reduction is being blamed on the higher fuel mileage rates forced upon us by the Feds, electric and hybrid vehicles.
What are they planning? One plan under consideration is taxing every vehicle $.04 per mile. That wouldn’t be bad if they remove the existing gas tax but I’ll bet that will not be part of the proposed legislation. The other outcome will be that it will be raised in the future but wages and job availability will still be stagnant.
Don’t think I believe the tax should remain. No, there are far to many untapped ways to reduce the spending at the State level.

posted by: art vandelay | February 10, 2014  10:37am

art vandelay

The law should also be amended to allow grocery stores to sell wine.

posted by: Wiley Coyote | February 10, 2014  11:50am

Reducing the gas tax should be the priority for ALL politicians and citizens.  This liquor tax reduction is blatantly a conflict and self serving.  He epitomizes the problem legislators have, they cannot see a conflict over dollar signs.  Where is the integrity?

posted by: StanMuzyk | February 10, 2014  12:15pm

Gov. Malloy and his tax and spend majority legislature - will never allow this to happen. Our controlling leadership always need more taxes - so they can spend more money.  We are rated the third WORST state in the country in fiscal control responsibility results—after New Jersey and Illinois.

posted by: CTDeeJay | February 10, 2014  6:39pm

It’s a good start but it doesn’t go far enough. We must also end minimum pricing, allow convenience & maybe drug stores to sell beer, and allow grocery stores to sell wine.

Competition and consumer freedom are important. There’s no good reason for the CT state government to be running interference for the package-store industry. What other industry does CT protect as much?

I know the very-powerful package-store lobby will scream that these changes will destroy “mom-&-pop” shops, but the cold fact is that lots of other states allow these things, yet the “mom-&-pop” shops remain in business. In California you can even buy liquor in grocery stores, but each neighborhood still has its “mom-&-pop” package store.

posted by: Grayghost | February 11, 2014  11:55am

Maybe this bit of history has bearing on supplier-dictated retail pricing:In 2000, the Federal Trade Commission forced record companies to abandon their practice of imposing a Minimum Advertised Price policy on music retailers.  The FTC action enabled Best Buy, Target, Walmart et al to advertise music CDs below wholesale cost as a loss leader.  Music specialty retailers such as Tower Records and Newbury Comics couldn’t compete and still make a profit.  Tower closed down, and Newbury shifted to other types of merchandise.