State legislature proposes hike in alcohol taxes

Tax would affect beers, wines, and liquors

Mike Baggerman
March 18, 2019 - 3:00 am

Buffalo Distilling Company on Seneca Street in Buffalo. March 15, 2019 (WBEN Photo/Mike Baggerman)

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BUFFALO, N.Y. (WBEN) – A bill introduced this month in the New York State Assembly would increase taxes on alcohol by 50 percent and allocate the revenue from the tax increase for addiction prevention and recovery services and programs.

The bill was introduced by New York City Assemblyman Michael DenDekker and co-sponsored by a dozen other members of the assembly.

The tax increase for beers in New York State would be 28 cents per gallon, or three cents per 12 ounces. Wine taxes would increase to 60 cents per gallon, or two cents per glass of wine. It would also increase liquor taxes of $3.40 per liter, or 10 cents for a one-ounce shot.

DenDekker told Spectrum News that the revenue generated would double the availability of existing programs for treatment and raise $260 million annually.

The proposed rate-hike may not sound like much to the consumer, but among those with concerns about the legislation is Buffalo Distilling Company Co-Founder Andy Wegrzyn.

“If it was ten cents per bottle I would say that would be a nice little step,” Wegrzyn told WBEN. “But ten cents per shot? I’ve got 25 shots in our average 750 mL bottle of krupnik. So that’s $2.50 additional. Somebody’s obviously paying for it, whether it’s us on the manufacturing end or as a distributor because we’re self-distributing.”

Wegrzyn said that his company is already paying two separate taxes: A quarterly tax to the federal government of about $2.70 per proof a gallon. They also pay $1.70 to New York State per wine liter. He explained that the federal government taxes based on proof while the state taxes based on volume.

Ultimately, the proposal by the state means an increase in operating costs for a small business like Buffalo Distilling Company. For example, a bottle of the 750 mL krupnik, which is normally $25, would now cost $27.50 for the consumer.

“Would you want your products to be bumped up by the government by ten percent?” he asked.

He said consumers could recognize the price cost.

The bill doesn’t have a matching bill in the New York State Senate and Wegrzyn isn’t sure how much power this will have in the legislature.

Wegrzyn noted how this bill is a step backwards from the state after they previously pushed for the expansion of the distillery industry.

“Our connection is to local farms,” he explained. “We use all local corn, wheat, barley, and wine to make our whiskeys and vodkas. We use local honey for our krupnik products. We use local apples for our brandy. The state has been working hard to reduce the burden to get this industry going…For them to reverse that and dump another $2.50 a bottle is not going to help that.”

With New York State pushing for the legalization of marijuana, Wegrzyn expressed his disappointment over New York scapegoating alcohol as a “gateway drug”. He also questioned whether taxes are really going to addiction prevention and recovery programs.

“I’m skeptical about everything,” he said. “Anything that comes down the pipe that sounds like a great idea – We could add a dollar to every gallon of gas or every cup of Tim Horton’s-  and we could solve a lot of problems, too.”

Among those with concerns over the bill is New York State Assemblyman Patrick Burke, who first learned about the bill when we asked him about it.

"It is another burden on people and one that I think, frankly, people are getting tired of," Burke said. "We tend to go to your average folks and always subtly increase the costs on everything they do. It's over the top sometimes. I haven't really reviewed this proposal from Assemblyman DenDekker but I know his heart is always in the right place. He's a good man. I do have some serious concerns about it."

Burke said there's lots of issues in New York State and is sick of working people being affected by this type of legislation.

The bill is currently in the Assembly Ways and Means Committee. We've reached out to Assemblyman Robin Schimminger, who is a member of that committee, for his thoughts on the bill.

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