Idaho beer, wine tax hike clears initial hearing

Proponents of boosting Idaho's beer and wine tax to pay for substance-abuse treatment won an initial victory in the Legislature when their bill was narrowly approved for further debate.

The measure, to more than triple the 15 cent per gallon beer tax to 52 cents and boost the 45 cent per gallon wine tax to $1.56, avoided being killed on a 10-8 vote in the House Revenue and Taxation Committee on Monday. A second hearing is forthcoming.

Keith Allred, head of The Common Interest government reform group, said drinkers should shoulder more of the burden of alcohol abuse, since beer and wine taxes are unchanged since 1961 and 1971, respectively. Gov. C.L. "Butch" Otter has proposed cutting 10 percent from state substance-abuse funding in fiscal year 2010, starting July 1, due to the budget crisis.

"Our goal ... has been to keep those funds whole," Allred told the 18-member panel before the vote.

In addition to boosting the tax, the bill would no longer tax beer and wine based on volume, but would charge 7.8 percent of the wholesale price of beer and 4.5 percent of wine, to keep pace with inflation. If the measure passes, it would dedicate $14.3 million in estimated new revenue for substance-abuse treatment, with another $5 million going to Idaho's general fund.

Idaho's beer tax is the 37th highest in the nation, while its wine tax ranks 34th. If the bill passes, the beer tax would be the ninth highest and the wine tax the seventh.

Nationally, the median beer tax is about 19 cents per gallon and the wine tax 69 cents, according to the Federation of Tax Administrators, a Washington, D.C.-based organization of state tax officials.