Lawmakers eye liquor tax increase

Mark Deaton
Mark Deaton
Kim & Dave Melton
Kim & Dave Melton
Bill Comerford
Bill Comerford

By Brooks Baehr - bio | email

HONOLULU (HawaiiNewsNow) – State lawmakers trying to fill a $850-million hole in the budget are likely to impose new taxes on liquor effective this summer.

One of the bills under consideration, Senate Bill 1289, would increase the tax on all liquor, wine, beer and distilled liquor, by 50 percent.

"Personally I think that is ridiculous," said part time Honolulu resident Kim Melton while sipping a glass of wine at Murphy's Bar and Grill in downtown Honolulu.

"I think there's other ways to cut expenses as opposed to increase revenue and taxes," Dave Melton added.

If passed as written, the Senate bill would increase the state tax on a gallon of distilled spirits from $5.98 per gallon to $8.97 per gallon effective July 1, 2011. The tax on a gallon of wine would jump from $1.38 to $2.07. A gallon of non-draft beer would be taxed an additional $.47 from $.93 per gallon to $1.40.

Put in more understandable terms, beer would be hit with an increase of $1.6 per case. That is about 4.4 cents per 12 ounce bottle.

There would be an additional 14-cent tax on every 750 milliliter bottle of wine. The same size bottle of distilled spirits would be taxed an additional 59 cents.

"Once again, it comes back to doing business in Hawaii. They haven't made it any easier for anybody," said Murphy's patron Mark Deaton.

Bill Comerford runs four bars, O'Toole's Irish Pub, Kelly O'Neil's, the Irish Rose Saloon, and Anna Banana's. He said by the time liquor passes from the wholesaler to the consumer the tax increase will have ballooned beyond the numbers above.

"How does it affect their industry (wholesaler). If in their industry it means Okay, I have to hire more drivers, or I have to let drivers go, or I have to increase the cost on this (or that), that's what's going to reflect on the product cost to me. So when it comes through the door it's going to come through the door more expensive," Comerford said. That extra cost would be passed on to customers.

Comerford said the average cost of a beer in his bars is $4.75.

"Four-seventy five. I make 14-cents," Comerford said. "What does government make? 55-cents. 55 cents on every single beer I sell. And they want more," Comerford explained. And when asked if the tax is fair he said, "No. People are in business for a reason, to make money. If I was to make money, it would be fair. But right now, currently they want me to balance their budget."

The House of Representatives is considering its own proposal to increase the liquor tax, but that bill does not yet detail just how much the tax would be increased.

One of the two bills is likely to pass and the increase would go into effect this summer.

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