Wyoming considers increasing the Beer Tax
Wyoming is not a big tax state, so it might not be much of surprise to learn that Wyoming’s Beer Taxes are the lowest in the country. Beer is taxed two cents a gallon and according to the Tax Foundation that amounts to a penny a six pack for a consumer.
There have been several efforts to raise the tax in recent years, but those proposals are typically dead on arrival. In a few weeks the Legislature’s Joint Revenue Committee will re-vist the issue as Wyoming Public Radio’s Bob Beck reports.
BOB BECK: Here’s the proposal. Senator Ray Peterson from Cowley wants the Joint Revenue Committee to support increasing the tax by five to ten cents a gallon. The idea is to use the money from the tax increase to be spent on substance abuse programs in the state. That idea came from Fremont County where officials say it’s been difficult to find the money to pay for substance abuse treatment programs. Riverton Mayor Ron Warpness says they need help.
RON WARPNESS: We have quite a serious alcohol problem in Fremont County. It’s a serious problem across the state, but in Fremont County we seem to have our numbers up there in lights.
BECK: Other communities say they have similar concerns and the Wyoming Association of Municipalities supports the tax increase. So do many in the substance abuse field such as Doctor David Birney who’s the Executive Director of the Peak Wellness Center.
DAVID BIRNEY: We need multiple streams of funding for our programs and any opportunity to find some kind of stable of funding source for what I consider to be essential treatment services and prevention services, I think would be a good thing to look at.
BECK: Birney says when you look at substance abuse in Wyoming the biggest issue is alcohol abuse. And while he stresses that the legislature is supportive, he says they do not get enough state funding to properly address the issue. He says tax revenue could be a big help.
Mayor Warpness says they targeted the Beer tax because it is so low.
WARPNESS: Beer is a substance that has two cents a gallon tax that was put in place in 1935 and it’s about time they start paying their way.
BECK: As you might imagine, some bristle at that statement. Mike Moser is the Director of the State Liquor Association. Moser says while the actual Beer Taxes are low, consumers do have to pay sales taxes on alcohol and there are other liquor related costs that those in the business pay. Moser argues that the liquor industry does pay its fair share.
MIKE MOSER: We bring in a lot more money off alcohol then a lot of other states. In fact that last time I ran the numbers, we bring in about three times as much per capita then Colorado does, even though their excise taxes are higher because we have a different system.
BECK: J.J. Moran is the owner of Four Winds Liquor and Lounge in Cheyenne. He says if the tax goes up, prices will go up higher than the tax.
J.J. MORAN: Let’s say it goes up to seven cents a gallon. That tax then will probably be taken from the distributor and it will be 15 to 20 cents, in which case we’re gonna have to raise our prices another 20 to 25 cents on our markup, so it could on the case of beer that you buy up to 45 or 50 cents.
BECK: Moran says it could mean the same kind of thing for a bottle of beer at the bar. He says beer drinkers are very price sensitive and it would likely lead them to purchase cheaper beer and drinking at home, which could have an impact on the bar business in the state.
Sound of the Alibi Bar
BECK: This is the Alibi Bar in Laramie. It is both a package store and a bar that caters to both established members of the community and college students. Ani Hathaway isn’t the least bit concerned about the tax.
ANI HATHAWAY: I honestly don’t think I would notice it or that it would affect me in any way. I don’t think I consumer enough beer for it to affect me. I think it could potentially be beneficial depending on how it’s used.
BECK: When told that the money would help fund substance abuse programs, Stacy Sewell says she’s in favor of the tax.
STACY SEWELL: I did my research on the reservation where there’s a lot of substance abuse, I think that’s a great place for it to go. But personally I’m going to drink whether it costs me $3 or $3.50 to do it.
BECK: But there are others who doubt that enough money would be raised to address the substance abuse problem and then there is the point that with the tax increase, the price of beer at the bar will increase more than the price of beer at the liquor store. This is Sarah Jacobs.
SARAH JACOBS: The establishments such as the Alibi will lose business because people will be paying so much for beer that they are going to stay home and drink it.
BECK: Which is what a bar owner like J.J. Moran is afraid of, he says there is a better way to address this than raising taxes.
MORAN: Why should a group of people have to pay for the abusers? What I would suggest is maybe charging more for a DUI.
BECK: The legislature’s revenue committee will take testimony on the proposal on September 13th. If the committee decides not to go forward with a bill, Senator Peterson says he will sponsor his own bill. But the measure faces a high bar. To get it introduced during the upcoming session, it will require a two-thirds vote in order for the bill to be considered. For Wyoming Public Radio, I’m Bob Beck.