The Thirsty Beagle: Brewers, alcohol industry wary of tax increase bill

Tuesday, February 7, 2017

Brewers, alcohol industry wary of tax increase bill

Remember that time last year when we had that crazy legislative session that ended with us passing sweeping changes to our state's alcohol laws?

Those, my friends, were the good old days.

We've got some new days coming up -- the 2017 legislative session starts today -- but it will be hard to believe anything that can happen this year will be quite as impactful as what we saw in 2016.

That doesn't mean nothing interesting for alcohol beverage fans will happen, though.

Take House Bill 1686. The bill, introduced by Rep. Harold Wright, is a reincarnation of a measure tossed about over the past several years that would institute a massive tax hike on distributors and producers of beer and liquor.

The bill would increase the excise tax rate on alcoholic beverages -- from $1.47 per liter to $3.50 per liter for spirits; and from $12.50 per barrel to $45 per barrel for beer (yes, $45, not a typo). There is little doubt among industry members that such a tax hike on manufacturers and distributors of beer and spirits would result in a jump in prices for consumers.

And it could also prove crippling to some existing brewers and serve as a serious deterrent to business development for new brewers.

So why try this bill? It's a bit of a pet project for Wright, a Republican from Weatherford who has authored the measure previously and has been studying the issue since at least 2011. Proponents have argued in the past that the bill has merit because it would be easier to collect excise tax from beer distributors (that includes craft brewers) than it is to collect sales tax from gas stations and convenience stores, many of which fail to submit monthly tax receipts to the state Tax Commission.

As distributors and manufacturers have argued, the real solution should be a matter of tax collection enforcement. It should be about getting retailers to submit their tax receipts, not throwing the burden on beer distributors and small craft brewers.

So is this much ado about nothing, considering past versions of the bill so far have not seen a successful run through the state Capitol?

What makes some insiders nervous this year is that Wright is Speaker Pro Tem, and he may have more influence this year in moving the bill through the legislative process due to his leadership position.

Another interesting angle: The most recent version of the bill included only low-point beer, but since Oklahoma is set to move to a single-strength system in 2018, HB 1686 would not discriminate on the question of alcohol strength. If passed, the bill would go into effect in October 2018 -- the same time State Question 792 would go into effect.

You should expect to see several groups line up to oppose this bill. Notable groups that have opposed it in the past include the Beer Distributors of Oklahoma and the Oklahoma Restaurant Association.

So, what else is happening on the local beer scene?

-This is the week for a huge amount of pint nights for Stone and New Belgium. Instead of re-hashing every one of the many events, I'll simply link to the Stone plans here and the New Belgium plans here.

-Roughtail will be at The Fur Shop today (Tuesday) for a special tapping of Powder (the beer brewed with an all-Mosaic-lupulin-powder hop bill).

-Iron Monk is hosting a Pint & Palette event  at 6 p.m. this Sunday. More info available here.

-Anthem is hosting a Beer & Palette event at 6 p.m. Feb. 14. You can check on tickets right here.

-Marshall's weekly Firkin Friday this week features a sneak peek of the spring release Revival Red Ale. Chai Red Ale is cask-conditioned and skips the traditional dry-hop in favor of an infusion of flavor from the addition of Chai tea spices.

-Also Friday, and also in Tulsa, Renaissance will be at Roosevelt's at 5 p.m. to launch Black Gold, an English-and-Irish-inspired hybrid stout.

-COOP announced this past weekend that the company's eighth anniversary (how is COOP eight years old?!) celebration is set for March 4. You can get more details here.

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