Distilled Spirits Council recommends statewide Sunday sales as no-tax alternative

RICHMOND, VA – The Virginia State Legislature’s budget includes a two percent increase in the mark-up on distilled spirits – the 12th price hike on Virginia spirits drinkers since 1979 and a move the Distilled Spirits Council is calling a “stealth tax” that will have consumers paying even more per bottle.

“Legislators aren’t pulling the wool over anyone’s eyes here – this is a tax,” said Council Vice President David Wojnar, referring to the latest liquor mark-up increase.  “By not calling a price mark-up a tax increase, the legislature has turned the art of deception into an exact science. This is a stealth tax and we urge Governor McDonnell to reject it based on his no tax pledge.”

A recent economic analysis by Council Chief Economist David Ozgo showed that increasing the tax mark-up on distilled spirits by two percent, as proposed, will add to Virginia’s already burdensome tax in which the implied excise tax rate on spirits is well over $20/gallon.  The analysis notes that Virginia has the third highest alcohol excise tax in the country, and twice the average of other “control” states in which state governments run liquor distribution and retailing.

“The State is killing the goose that lays the golden egg,” Wojnar said, noting that by increasing the tax on spirits, again, the State is essentially hurting the very market it operates.  “Raising the mark-up even more makes terrible business sense,” he said.  “Virginia government needs to end its big tax philosophy and allow more ABC stores to open on Sundays.  By becoming more consumer-friendly, the Commonwealth can help today’s busy consumers while also adding to the bottom line, blocking out the need for higher taxes.”

Wojnar pointed to the analysis which also showed Virginia stands to gain an additional $5.5 million in new tax revenues and profits by allowing statewide Sunday sales at ABC stores.