Where Do Liquor Sales Tax dollars Go?
With all this talk about liquor tax dollars, it's interesting to know where your tax dollars have been going. The WSLCB provides this graphic as a breakdown of the typical bottle of liquor:
In the 2011 fiscal year, Washington State collected $22,482,821 in liquor taxes. The site notes:
The revenue flowing to the state General Fund is used for education, healthcare and other related programs. Revenue returned to local governments is used for prevention programs, law enforcement, emergency medical services and many other local needs.
The retail price of liquor currently being sold in state and contract liquor stores is determined by five elements:
- Distiller's, brewer's or vintner's price to the Board
- Federal taxes - excise tax rates on all liquor, plus custom duty rates on imported liquor
- Freight costs
- Markup (see table below), which is controlled by the Board. Markup covers operating costs of the state liquor control system and provides a yearly profit that is shared by the state and local government. The Board's markup is comparable to the wholesale and retail markup applied by private businesses and is also expressed as margin on sales for comparative purposes
- State sales taxes (see table below), which is set by the state Legislature
To recoup much of the income WSLCB loses on the sales of alcohol after I-1183, the state is mandating a 10% fee to distributors and a 17% fee to retailers. These costs could be transferred on to patrons of these establishments. A Washington State fiscal report noted, however:
The fiscal impact cannot be precisely estimated because the private market will determine bottle cost and markup for spirits. Using a range of assumptions, total State General Fund revenues increase an estimated $216 million to $253 million and total local revenues increase an estimated $186 million to $227 million, after Liquor Control Board one-time and ongoing expenses, over six fiscal years. A one-time net state revenue gain of $36.4 million is estimated from sale of the state liquor distribution center. One-time debt service costs are $5.3 million. Ongoing new state costs are estimated at $158,600 over six fiscal years.
Governor, Christine Gregoire has argued that expanding sales would help generate more revenue for the state but cautions that more sales may generate new costs to the state - for example, in treatment for drug and alcohol abusers.
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