HARTFORD, April 2, 2002 – The Connecticut Joint Committee on Finance, Revenue and Bonding yesterday defeated a proposal to increase the tax on distilled spirits, a move heralded by the Distilled Spirits Council as “a sound economic decision to protect Connecticut’s hospitality and tourism industry.” Originally the state proposed a series of tax increases including a 100 percent increase on beer, wine and spirits. Later substitute language was offered that deleted the beer and wine tax while reducing the increase on spirits to approximately 25 percent. Last night, the Distilled Spirits Council was successful in striking that modified increase as well. “This is a victory for Connecticut’s hospitality industry and state taxpayers,” said Peter H. Cressy, President of the Distilled Spirits Council. “This tax would simply be another blow to the struggling hospitality industry with no real financial gain for the state, and they rejected it.” Cressy, testifying for the Distilled Spirits Council at a March 18 hearing, showed a major error in the state’s revenue estimates from doubling the tax. Based on flawed analysis, the state originally estimated that doubling the tax would generate twice the amount of revenue for state coffers. At the hearing, Cressy pointed out the state would actually lose $500,000 in distilled spirits tax revenues from a reduction of 1.3 million gallons of distilled spirits sales both from decreased in-state sales and increased cross border purchases. Connecticut’s current tax rate on spirits is $4.50/gallon, the ninth highest in the country. If the tax had doubled, Connecticut would have had the highest spirits tax in the country. The Distilled Spirits Council of the United States is the national trade association representing producers and marketers of distilled spirits sold in the United States including two Connecticut-based companies, Guinness UDV in Stamford and Allied Domecq Spirits and Wine North America in Westport.