Relates to increasing the tax on alcohol

BILL NUMBER:S6393

Title of bill

An act to amend the tax law, in relation to increasing the tax on alcohol

Purpose/summary of provisions

Section 1: (a) amends the tax law to increase the tax on beer from 14 cents per gallon to 24 cents per gallon; (b) increases the tax on wine from 31 cents per gallon to 51 cents per gallon, except certain cider shall be raised from four hundredths cents per gallon; (c) increases the tax on artificially carbonated sparkling wines from 30 cents per gallon to 51 cents per gallon, except for certain sparkling cider shall be four hundredths cents per gallon; (d) Increases the tax on natural sparkling wines from 30 cents to 51 cents per gallon, except natural sparkling cider increased to four hundredths cents per gallon; (e) increases the tax on liquors not more than 24% alcohol from 67 cents per liter to $1.23 per liter, except liquor with not more than 2% of alcohol shall increase 2 cents per liter; (f) increases the tax on all other liquors from $1.00 to $2.26 per liter. (h) 100% of the taxes, interest, penalties and fees collected or received by the commissioner shall be allocated to the general fund.

Section 2: amends the tax law by adding a new subdivision to automatically adjust the tax, upward or downward, on July 1st of every year using the consumer price index for all urban consumers (CPI-U) as prepared by the U.S. Department of Labor. The commissioner shall promulgate regulations to specify the methodology to be used to determine the goods and inventory to which the increase shall apply. These regulations shall only apply if such increase is greater than 10%.

Section 3: This act shall take place April 1, 2013 provided however that any rules or regulations necessary to implement the provision this act may be adopted and issued on or after the date this act becomes law. The commissioner of taxation and finance may take any steps necessary to implement this act prior to its effective date.

Justification

Currently, New York's tax on wine is the second lowest in the nation. Neighboring states have significantly higher rates, Connecticut taxes at 72 cents per gallon and New Jersey at 88 cents. Raising the wine tax in New York to 51 cents per gallon and the beer tax to 24 cents per gallon could yield the state an estimated $65 million annually.

In the current economic climate where the legislature faces difficult choices such as decreasing school aid funding and or eliminating vital services to our communities, we should first consider ways we can increase our revenue.

Fiscal implications

Revenue Enhancement. Raising the wine tax in New York to 51 cents per gallon and the beer tax to 24 cents per gallon could yield the state an estimated $65 million annually.

Effective date

This act shall tax effect April 1, 2013, provided, however, that any rules or regulations necessary to implement the provisions of this act may be promulgated and any procedures, forms, or instructions necessary for such implementation may be adopted and issued on or after the date this act shall have become a law. The commissioner of taxation and finance may take any steps necessary to implement this act prior to its effective date.