General Assembly Discussing a “Special Sales Tax” on Alcohol

As reported in the Maryland Politics section of the Baltimore Sun, members of the General Assembly are discussing whether an extra 3 to 4 percent “special sales tax” should apply to alcohol sales.  Apparently, Washington, D.C. has instituted such an approach and health advocates think it makes sense to do it in Maryland as well.

Previously, efforts to increase Maryland’s alcohol costs have focused on raising the excise tax, which is levied at the wholesale level. For decades, the excise tax on alcohol has been identical in DC and Maryland, and Maryland’s liquor lobby said that changing it here could push consumers across the border to purchase in DC.

Until recently, alcohol tax advocates — and lawmakers — seemed largely unaware that DC also taxes at the consumer level. A sales tax increase would eliminate the mystery of how much wholesalers and retailers will mark up their products.

A 3 percent special tax generates about $100 million in revenue per year.

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