Idaho House panel rejects tax hike on beer, wine

A House committee Wednesday killed a proposal to increase the tax on beer and wine, which would have raised $14 million for substance abuse treatment and another $5 million for Idaho's general fund.

The 13-5 vote in the House Revenue and Taxation Committee followed four hearings that stirred passions on both sides of the debate, but ultimately only won support for the measure from just three Republicans and two Democrats.comments

The plan to boost the wine tax to $1.56 a gallon from 45 cents and the beer tax to 52 cents a gallon from 15 cents was heavily opposed by the alcoholic beverage industry and retailers.

Ken Burgess, a lobbyist for Idaho bars and restaurants, told the panel his members would likely never support a tax increase. A lobbyist for beer company Anheuser-Busch likewise spoke against the measure.

"Anheuser-Busch would say the problems associated with the abuse of alcohol are societal problems that are a result of individuals' poor choices," said Ken McClure, representing the brewer that buys barley from eastern Idaho farmers and malts it at a plant in the region. "They should be addressed, if appropriate, through broad-based taxes rather than narrow taxes that target a specific group."

Rep. James Ruchti, D-Pocatello, voted against the measure after saying it would not be good to raise taxes in the midst of the deepest economic crisis in decades. The beer tax hasn't been increased since 1961 and the wine tax hasn't been raised since 1971, prompting Ruchti to concede the debate over raising it "is an issue that isn't going away for the state."

Still, "this is not the right time to raise a tax on Idaho business," Ruchti said. "We would be sending a message to Idaho businesses that government doesn't get it."