Tax holiday on alcohol for holidays [Waterbury Republican American]

Canton Republican proposes Nov. 15 to Dec. 31 tax exemption

By Paul Hughes, Article as it appeared in the Republican-American

HARTFORD — A state lawmaker is proposing a tax holiday for merrymakers from just before Thanksgiving through New Year’s Eve this year.

Sen. Kevin Witkos, R-Canton, is sponsoring legislation that would exempt beer, wine, and liquor from the sales tax from Nov. 15 to Dec. 31.

“I don’t know who is going to be opposed to it,” he said. “Certainly not the retailers and the consumers.”

The purpose of this trial holiday is to determine whether the exemption increases sales. If purchases rise appreciably, Witkos said, the legislature should then revisit the question of repealing the sales tax on beer, wine, and liquor.

“If they increase, as far as I’m concerned that is a good thing,” he said.

The legislation has been referred to the Finance, Revenue and Bonding Committee. Witkos is a member of the committee.

There is no estimate yet of the potential tax loss from the experiment Witkos proposes. One will be prepared if the legislation advances.

The bill would not affect the state’s excise tax on alcoholic beverages.

If the proposed exemption has the desired effect, Witkos said he is expecting an accompanying increase in alcoholic beverage taxes that would offset all or a significant portion of the lost sales tax revenue.

More than 6 million gallons of beer, wine, and liquor were sold last November and December, according to state figures. Some $12.1 million in alcoholic beverage taxes were collected apart from sales taxes on the purchases.

Overall, the alcoholic beverages tax raised $60.4 million in the last fiscal year.

Witkos said he first got the idea for the sales tax exemption when legislature reviewed the state’s liquor laws and taxes in 2012.

Lawmakers heard testimony then that eliminating the sales tax on beer, wine, and liquor would make the state’s prices more competitive with neighboring states and increase sales.

“Everybody who came forward testified that we are not competitive because of our taxes,” Witkos said.

The state of Massachusetts repealed its sales tax on beer, wine, and liquor in 2011.

The state of Rhode Island just stopped charging sales taxes on wine and spirits purchased from a liquor store on Dec. 1. Beer and other malt beverages are still taxed there.

If Connecticut follows suit, Witkos said, fewer people living near the state’s borders are likely to drive across state lines to buy beer, wine, and liquor, and retailers may get more business from out-of-state customers.

“I know people who will drive 20 miles to save 4 cents on a gallon of gas,” he said.

Witkos is also sponsoring another bill beer lovers will like. It would exempt all beer purchases from the sales tax. This legislation is also pending before the finance committee.