Notice of Introduction for House Bill 2493 - Update: 10 Year Analysis Complete
Office of the Governor / Office of Financial Management sent this bulletin at 02/23/2024 09:28 AM PST
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UPDATE: The 10 year analysis for HB 2493, titled AN ACT Relating to ready-to-serve alcoholic beverages, has been completed. The Office of Financial Management has identified this bill as requiring a ten-year projection of increased cost to the
taxpayers or affected fee payers.
Ten-year projection:
|
Fiscal |
Business and occupation tax |
Liquor sales tax |
Liter tax - Liquor |
Retail sales tax |
Total |
|
|
|
||||||
|
2024 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
|
2025 |
$271,000 |
$139,600,000 |
$359,000,000 |
($23,137,000) |
$475,734,000 |
|
|
2026 |
$465,000 |
$236,900,000 |
$609,900,000 |
($39,163,000) |
$808,102,000 |
|
|
2027 |
$523,000 |
$264,600,000 |
$681,400,000 |
($43,670,000) |
$902,853,000 |
|
|
2028 |
$579,000 |
$292,500,000 |
$753,200,000 |
($48,277,000) |
$998,002,000 |
|
|
2029 |
$634,000 |
$320,400,000 |
$825,000,000 |
($52,885,000) |
$1,093,149,000 |
|
|
2030 |
$689,000 |
$348,300,000 |
$896,800,000 |
($57,492,000) |
$1,188,297,000 |
|
|
2031 |
$744,000 |
$376,100,000 |
$968,600,000 |
($62,099,000) |
$1,283,345,000 |
|
|
2032 |
$799,000 |
$404,100,000 |
$1,040,400,000 |
($66,607,000) |
$1,378,692,000 |
|
|
2033 |
$854,000 |
$431,900,000 |
$1,112,200,000 |
($71,214,000) |
$1,473,740,000 |
|
|
|
||||||
|
Total: |
$5,558,000 |
$2,814,400,000 |
$7,246,500,000 |
($464,544,000) |
$9,601,914,000 |
|
Liquor and Cannabis Board:
Section 1(54) defines "Ready-to-serve alcoholic beverage," and also gives some examples such as canned cocktails, premixed cocktails, hard kombuchas, and flavored malted beverages. Section 2 intends that these ready-to-serve beverages are to be taxed the the same rate as spirits.
However, Section 1(54) creates some conflicts, for example with the existing definition of beer ("any malt beverage, flavored malt beverage, or malt liquor") in Section 1(3).
So "flavored malt beverage" is defined as both beer and ready-to-serve alcoholic beverage. With this conflict, it is uncertain how some products would ultimately be taxed - as beer or wine (current process) or as ready-to-serve (spirits tax rate). If this bill passes, the Board may need to engage in rulemaking to clarify how certain products are to be taxed.
Since the Board's actions are unknown, the cash receipt impact is INDETERMINATE.
However, if it is assumed that all beer-based and wine-based "ready to serve" products would be taxed at the spirits tax rate and no longer as beer or wine, then the revenue losses below could be anticipated. DOR shows the spirit tax impact on their fiscal note.
BEER TAX lost revenue (assuming the $8.08/barrel rate, 117.347765 liters/barrel, 8 months of revenue loss in FY25)
FY25; ($6,799,000)
FY26; ($11,560,000)
FY27: ($12,922,000)
FY28: ($14,284,000)
FY29: ($15,645,000)
WINE TAX lost revenue (assuming the table wine rate of $.2292/liter, 8 months of revenue loss in FY25)
FY25; ($747,000)
FY26; ($1,270,000)
FY27: ($1,420,000)
FY28: ($1,569,000)
FY29: ($1,719,000)
Ten-year projection prepared in consultation with the following agencies:
Department of Revenue
Liquor and Cannabis Board
Bill sponsors and contact information:
Representative Michelle Caldier, Prime Sponsor
Republican
(360) 786-7802
michelle.caldier@leg.wa.gov
Legislative Bill Information Website:
http://apps.leg.wa.gov/billinfo/
Initiative 960 Website: http://www.ofm.wa.gov/tax/default.asp