What's happening
This bill increases alcohol taxes in New York and ties future tax adjustments to inflation, allocating all collected funds to the general fund.
Why it matters
Raising alcohol taxes could impact consumer prices and consumption patterns. , potentially leading to higher costs for alcoholic beverages and possibly affecting small businesses, bars, and restaurants that rely on alcohol sales.
Linking future tax rates to inflation ensures that the real (inflation-adjusted) value of alcohol taxes doesn't erode over time. , meaning the state’s alcohol tax revenue should keep pace with rising prices, which could provide more consistent funding for government services.
Dedicating all alcohol tax revenue to the general fund gives lawmakers maximum flexibility in how these funds are spent. , rather than restricting them to health, substance abuse, or other specific programs, which could affect funding for targeted public health initiatives.
The bill includes a safeguard that only adjusts taxes for inflation if the change exceeds 10%,. which could prevent frequent minor tax rate changes and provide more predictability for businesses and consumers.
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Who cares
Headline styles
Raise Alcohol Taxes
Plain English, a few words. Used as the page title.
Sponsors
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History
- Referred to investigations and government operations
- Referred to investigations and government operations
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3427
2017-2018 Regular Sessions
IN SENATE
January 23, 2017
Introduced by Sen. PARKER -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
AN ACT to amend the tax law, in relation to increasing the tax on alcohol
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraphs (a), (b), (c), (d), (e) and (f) of subdivision 1 of section 424 of the tax law, paragraphs (a), (b), (c) and (d) as amended by section 1 of part X-1 of chapter 57 of the laws of 2009, paragraph (e) as amended by chapter 190 of the laws of 1990 and paragraph (f) as amended by chapter 508 of the laws of 1993, are amended and a new paragraph (h) is added to read as follows:
(a) [Fourteen cents] Twenty-four cents per gallon upon beers;
(b) [Thirty cents] Fifty-one cents per gallon upon still wines, except cider containing more than three and two-tenths per centum of alcohol by volume, upon which the tax shall be [three and seventy-nine] four hundredths cents per gallon;
(c) [Thirty cents] Fifty-one cents per gallon upon artificially carbonated sparkling wines, except artificially carbonated sparkling cider containing more than three and two-tenths per centum of alcohol by volume, upon which the tax shall be [three and seventy-nine] four hundredths cents per gallon;
(d) [Thirty cents] Fifty-one cents per gallon upon natural sparkling wines, except natural sparkling cider containing more than three and two-tenths per centum of alcohol by volume, upon which the tax shall be [three and seventy-nine] four hundredths cents per gallon;
(e) [Sixty-seven] One dollar and twenty-three cents per liter upon liquors containing not more than twenty-four per centum of alcohol by volume except liquors containing not more than two per centum of alcohol
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06607-01-7
S. 3427 2
by volume, upon which the tax shall be [one cent] two cents per liter; and
(f) [One dollar] Two dollars and [seventy] twenty-six cents per liter upon all other liquors; when sold or used within this state, except when sold or used under such circumstances that this state is without power to impose such tax or when sold to the United States and except beers when sold to or by a voluntary unincorporated organization of the armed forces of the United States operating a place for the sale of goods pursuant to regulations promulgated by the appropriate executive agency of the United States, to the extent provided in such regulations, directives and policy statements of such an agency applicable to such sales, and except when sold to professional foreign consuls-general, consuls and vice-consuls who are nationals of the state appointing them and who are assigned to foreign consulates in this state, provided that American consular officers of equal rank who are citizens of the United States and who exercise their official functions at American consulates in such foreign country are granted reciprocal exemptions; provided, however, that the commissioner may permit the sale of alcohol without tax to a holder of any industrial alcohol permit, alcohol permit or alcohol distributor's permit, issued by the state liquor authority, and by the holder of an alcohol distributor's permit, class A, issued by such authority to a holder of a distiller's license, class B, or a winery license, issued by such authority and may also permit the use of alcohol for any purpose other than the production of alcoholic beverages by such holders without tax; provided also that the commissioner may permit the sale of cider without tax by a holder of a cider producer's license issued by the state liquor authority to a holder of a cider producer's license or a cider wholesaler's license issued by such authority.
(h) Notwithstanding any other provision of this article, one hundred percent of taxes, interest, penalties and fees collected or received by the commissioner under paragraphs (a) through (f) of this subdivision shall be allocated to the general fund.
§ 2. Section 424 of the tax law is amended by adding a new subdivision 7 to read as follows:
7. The tax imposed by subdivision one of this section shall be adjusted effective July first of each year by applying to such tax an upward or downward adjustment, as the case may be, using as the factor for such adjustment the percentage amount by which the all items consumer price index for all urban consumers (CPI-U) as prepared by the United States department of labor for the first calendar quarter of such year exceeds or is less than such index for the first calendar quarter of the proceeding year. The commissioner shall promulgate regulations specifying the methodology to be used to determine the goods and inventory to which the increase shall apply effective each July first, except that, for an increase in the tax pursuant to this subdivision, such regulations shall apply only if such increase is greater than ten percent.
§ 3. This act shall take effect April 1, 2019, 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.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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 $2.25 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, 2019 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.
Legislative history
2015-16: S.1553A - Amend and Recommit to Investigations & Gov't Ops 2013-14: S.3123A - Amend and Recommit to Investigations & Gov't Ops 2011-12: S.6393 - Referred to Investigations & Gov't Ops 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, 2019, 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 ox 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.
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