Random Rants: Beer Tax

May 8, 2013 at 4:56 pm

Beer pintBeer sales have done well in recent years and have shown themselves to be somewhat recession proof. It sort of stands to reason if you think about it. What is flowing from the taps and being swilled by John and Jane Q. Minnesotan has not been unnoticed by our busy and creative legislature.

In fact, there is precious little that our legislature doesn’t notice in the realm of productivity, economic vitality and successful enterprise. The beer business is doing well in Minnesota, so the natural inclination of our elected officials is to stick their hands out, or more specifically, stick them it into the pockets of beer producers and drinkers. Wally the Beer Man, meet Wally the Taxman.

The amount of this newly proposed tax is generally described as 7 cents per retail beer or shot of alcohol. With the cost of most things rising – except likely your house – this may not seem like a hardship to most. If you can’t afford an extra 7 cents per drink, you are either already drinking too much, or you should probably not be drinking at all, or you are just a miserly tightwad.

But is it really this simple? Is the real cost only 7 cents for every pint you put away?

Not according to Mark Stutrud, CEO of Summit Brewery. His take on the situation is that the actual cost per beverage unit is closer to 14 cents. The current excise tax a brewery pays the state is $4.60 per 31 gallon barrel of beer. The newly proposed excise tax is $27.75 per barrel. A tax increase this large at the wholesale level cannot help but be amplified as the beer travels from distributor, to retailer to end consumer. The explanation of the legislators proposing the new tax is that the proceeds will be used to repay the State’s debt to public schools. Wait a minute, could the legislators be using children to shield them from criticism over yet another new tax?  Of course this is not possible. These are brave people, who are only thinking about the needs of our children and you, the likeable but presently overly compensated beer-swiller.

There is some movement in the legislature to consider a tax credit to help offset the increase for Minnesota breweries. As previously mentioned, legislators are thoughtful and understanding. Partial tax relief is well and good, but what this really amounts to is creating another tax-related regulation on business, followed by another special interest group loophole, followed by more expense for the consumer. Now seems like fine time to recognize our legislators for being creative and observant people.  Perhaps they should use some of their fine observation skills and creative capacity to identify ways to run our government more efficiently, instead of predictably gouging us for our pints of pilsner.

The opinions expressed in Random Rants are solely those of the author and do not represent the opinions or viewpoints of NAIOP Minnesota, its leadership or its staff.

Entry filed under: Random Rants.

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