The State’s Costly Blue Law
The Sunday ban on liquor sales costs state an estimated $10 million
Gov. Tim Pawlenty recently suggested that Minnesota should strive to remain competitive in a way that’s “more probusiness and projobs.”
Well, legislators need look no further than Minnesota’s irrational and outdated Blue Law banning Sunday alcohol sales.
Despite America’s overwhelming repeal of Prohibition 76 years ago, Minnesota remains one of the last few holdouts by continuing to ban the sale of alcohol at private retail stores on Sunday — a ban that costs the state millions annually in unrealized tax revenues.
As Minnesotans debate various policy options to become more competitive, state legislators should seriously consider adopting Sunday sales like most other states — including neighboring Iowa, the Dakotas, Wisconsin and even Canada.
Consumer demographics have changed since Prohibition ended in 1933. Sunday is now the second-busiest retail shopping day of the week. As consumers spend Sundays at malls, shopping for groceries and eating and drinking at restaurants, Minnesota’s spirits merchants have no choice but to turn customers away at the door.
As a result, the state flushes millions in much-needed tax revenue down the drain while needlessly inconveniencing potential Sunday customers. Of course, repeal would not force any store owner to open. It simply would give small-business owners who want to open on Sundays the choice.
According to a recent economic analysis of statewide Sunday sales, Minnesota would generate more than $10 million in new annual taxes and profits for the state simply by repealing this outmoded sales ban. When every penny counts, that’s significant revenue left on the table.
A national analysis of states that allowed Sunday sales between 2002 and 2005 (12 states) showed that in 2006 each state saw an average 5 to 7 percent increase in tax revenues.
Importantly, these states saw zero negative social impact, such as increased drunken driving or underage drinking. Colorado, the most recent state to enact Sunday sales, even saw its 2008 alcohol excise tax revenue collection increase by 6 percent despite the toll of the recession.
Nationwide, states have seen the positive effect of Sunday sales on consumers, small-business owners and the state treasury. Anticompetitive sales bans, regardless of the industry, do not make sense in today’s economy. That’s why state leaders across the country are striking them down for good.
Minnesota should be no different. It’s time for legislators to repeal this Prohibition holdover that’s long-outlived its relevance.
–Ben Jenkins is Communications Director for the Distilled Spirits Council of the United States