MONTGOMERY, Ala. — On Wednesday, the Alabama Alcohol Beverage Control Board unanimously voted for a five percent alcohol tax hike that will come in the form of marked-up prices on wholesale liquor and wine and retail prices on liquor.
The 3-0 vote opens a 35 day public comment period where people can contact the ABC about their thoughts on the proposal.
Currently, the state markup on alcohol prices is 30 percent from real market value. If ABC’s new regulation goes through, the markup would increase to 35 percent. Funds from the tax increase will to the state’s general fund, court system, and district attorneys offices.
ABC’s decision to increase taxes has drawn ire from small business owners, elected politicians, and consumers alike.
Brandon Owens, executive director of the Alabama Beverage Licensees Association, told Al.com that the price increase will hurt small businesses. “A lot of these small businesses buy by the bottle in this state, and this is going to be an increase in their expenses,” he said.
As a result of the increase, Alabama consumers will be hit with higher prices when they buy liquor from retailers.
In a report by the Associated Press, State Sen. Sen. Bill Holtzclaw (R-Madison) argued such taxes should not stem from unelected government bureacrats. “I’m not against these markups, I’m against them coming through the backdoor of the Statehouse,” he said.
According to research from The Tax Foundation, Alabama is fourth in the country among states with the highest state spirits excise tax rates. In the per gallon price of alcohol in Alabama, $18.23 comes from tax as of 2014 data.
Alabama’s ABC was established to completely regulate the sale of alcohol in the state via control over distribution, licensing, and enforcement. In addition to its price-controlling regulatory actions, the ABC also operates government-owned liquor stores that sell the majority of alcohol purchased in the state.