Who Will Soak Up Louisiana’s Alcohol Tax Increase?
Who should absorb the state's tax increase on alcohol? Will it be the brewers? Will it be the bars? Will it be the consumers? If you guessed either the brewers or the bars then I have some beach front property in Ruston I'd like to sell you.
Of course you and I, the consumers of alcohol, will be absorbing the state's new tax increase on booze. It takes effect Friday April 1. Chances are most of us won't even notice it. Estimates suggest that the new tax will result in an increase of a penny or possibly two pennies per serving. That would mean a $15 beer at the Superdome would be even more ridiculously over priced by another penny or two.
Our state has not an increase in its alcohol tax since 1948. Still we have one of the highest taxes on alcohol in the country. John Williams is the Director of the Louisiana Beer Industry League.
Louisiana was already the 14th highest excise tax, so the increase is going to put us closer to the top 10 in the country as far as the rate.
Williams comments were reported by the Louisiana Radio Network. He went on to say that unlike some of the other new taxes passed by the state legislature. This tax is a permanent one. The other taxes have sunset dates built in based on revenue raised or a period of time.
The new tax on alcohol is expected to help the state generate $5 million in revenue between April 1 and the end of June. This is all in response to the state's looming budget deficit.
Will the new tax have an effect on Louisiana's growing brewery industry? Williams believes it will.
They’re all going to pay it. There’s no exemptions for any of the manufacturers for the state excise tax.
The bottom line is this. The industry will protect its bottom line. Chances are that while producers are in fact paying their share of the tax up front. They will collect that loss of revenue from us by raising their prices just a little. Let's face it, at the suggested tax rate you'd have to consume almost a hundred drinks to cost yourself a dollar in new taxes. I don't think even our legislators drink that much.