Commonsense bill supports small businesses, boosts consumer convenience & increases revenue
The Distilled Spirits Council of the United States (DISCUS) applauded the Ohio House for approving legislation that includes language to lower the tax rate on spirits-based ready-to-drink cocktails (RTDs) with an alcohol-by-volume (ABV) of 10% or less. The language was included in the state’s operating budget bill, HB 96, and now heads to the Senate for consideration.
Despite these spirits RTDs having the same or lower ABV than beer-based RTDS, they are currently taxed nearly 7 times higher in Ohio. This state-level tax disparity is on top of a federal-level tax disparity, where spirits RTDs are taxed at more than twice the rate of beer- and wine-based RTDs.
“Taxing spirits-based canned cocktails nearly seven times higher than similar beer-based seltzers with the same alcohol content makes no sense and harms local businesses and consumers,” said Andy Deloney, DISCUS senior vice president & head of state public policy. “The government shouldn’t be in the business of picking winners and losers in the marketplace, but that is exactly what Ohio’s unfair tax structure does. We applaud House passage of HB 96 which would lift the burden of unfairly high taxes on spirits RTDs, supporting consumer choice and allowing the growing local craft distilling industry to continue to flourish.”
Spirits-based RTDs are currently subject to the regular spirits tax rate of $1.20 per gallon. HB 96 sets the tax rate at $0.35 per gallon.
The distilled spirits industry is a significant driver of economic activity in Ohio, contributing to the vibrancy of the manufacturing, hospitality, tourism and agriculture industries. There are currently 51,700 jobs in the state depending on the spirits industry, generating more than $5.8 billion in state economic activity each year.