Beer, wine and liquor in Minnesota could be facing an excise tax increase for the first time in decades.
Legislation introduced Monday – and the focus of a heated floor debate within hours of introduction – would hike the liquor excise tax by pennies a glass, and use the estimated $190 million in tax revenue raised to offset the legal and health care costs incurred by alcohol abuse.
Alcohol costs the state’s legal and health care infrastructure millions a year, said bill sponsor, state Rep. Karen Clark, DFL-Minneapolis. Now, she said, “alcohol needs to pay its own way.”
“We have a big problem with alcohol in Minnesota,” said Clark, who teaches nursing. “This is a good start.”
The bill would increase excise taxes on beer from $2.40 to $13.97 per 31-gallon barrel – or about 3 cents per glass. Wine excise taxes would go up about 9 cents a glass and liquor taxes would increase about 10 cents. The tax revenue would be used for treatment programs, drug courts and other support programs.
The per-gallon tax hike raised alarm on the House floor when Clark brought up a request to have a hearing on the bill in the Human Services Finance Committee. Republicans quickly pushed for the bill to be heard first in the tax committee.
“This is a massive, massive tax increase on alcohol,” said state Rep. Greg Davids, R-Preston.
While excise taxes haven’t been raised since the 1980s, sales taxes have and Davids notes that his district sits near the Iowa border, where liquor taxes are considerably lower than Minnesota’s.
In Fillmore County, he said, “a lot of these beverages are considered food. We consider them one of the seven major food groups,” he said. “A gallon of wine – we call that lunch. That is not a large, large quantity.”
In the end, Clark withdrew her request to have the bill moved to Health and Human Services Finance to continue the debate off the House floor.