WY - Proposed beer tax hike talk draws opposition
CHEYENNE, Wyo. -- The idea of increasing Wyoming's state tax on beer — the nation's lowest — is drawing opposition from wholesalers who say it would hurt their ability to compete and put a dent in drinkers' pocketbooks.
The Wyoming Legislature's Interim Revenue Committee is set to discuss a proposed hike in the tax Friday in Buffalo. The state hasn't increased the tax since it was levied at 2 cents a gallon in 1935. The median beer tax nationally is 19 cents.
Sen. Ray Peterson, R-Cowley, chairman of the Senate Revenue Committee, has proposed raising the tax to help pay for substance abuse treatment.
Pat Higgins owns the Orrison Distribution Co. in Cheyenne, one of 15 beer wholesalers in the state. He is scheduled to testify against an increase in the beer tax Friday.
Higgins said surrounding states haven't raised their tax on beer in recent years. For instance, Colorado's beer tax is 8 cents a gallon and hasn't be raised since 1986, he said.
"The reality is that if the tax goes up, the price just gets raised, and Joe Sixpack pays the price," Higgins told the Casper Star-Tribune (http://bit.ly/14HkrHj).
He said that in general, Wyoming retail beer prices are fairly competitive with surrounding states that have a higher tax.
But beer might be cheaper in neighboring states where big box retailers like Walmart and grocery stores have liquor licenses and more people, Higgins said.
"We're fairly competitive, given the drawback of a small-population state," Higgins said. "If you're a retailer operating in Lusk, there are only so many people in Lusk."
Rep. Mike Madden, chairman of the House Revenue Committee, is interested to hear how much it costs the state to collect the beer tax.
Collection costs might be so high, he said, that the revenue doesn't warrant the price of collecting it.
"In my opinion, you can either raise it or get rid of it," said Madden, an economist and Republican from Buffalo.
Beer tax collections have been flat in recent years, averaging about $265,000 per year.
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