The July 3 Columbian story “Survey says liquor prices not lower in many cases” failed to point out the key reason for sticker shock at the register: Washington state had the highest alcohol taxes in the nation prior to privatization, and now even more taxes and fees have been added with the new system. While that is no solace for consumers, it will be up to legislators to protect Washingtonians and liquor retailers during this tumultuous time.
Under the new system, consumers still pay the 20.5 percent spirits sales tax and $3.77 per liter excise tax, but are now paying two more taxes on gross receipts: a 17 percent retail tax and a 10 percent wholesale tax. Together, the new effective sales tax rate on a bottle of spirits in Washington is approximately 100 percent on many purchases. It’s no wonder consumers are upset about paying such a hefty tab. Before privatization, Washington’s spirits tax rate was more than five times the national average. Post-privatization, it’s even higher.
As chief economist of the Distilled Spirits Council, I advise legislators to immediately consider a rollback of these confiscatory spirits taxes that overwhelm consumers, hurt the state hospitality industry and add to further lost revenue from cross-border sales.