Beer tax boost?

Oregon democratic sees better chance of pushing through increase

Nov 13, 2006 - Oregon beer drinkers could be facing new taxes as a result of last week's elections.


Democrats took control of the state legislature for the first time in 18 years and some are already talking about increasing the beer tax for the first time since 1976.

"With a Democratic House, Senate and governor, I think we can pass the bill," says state Sen. Bill Morrisette in a story in the Eugene Register-Guard. Morrisette previously has been thwarted in several attempts to boost the tax. He wants to raise the levy on a 12-ounce glass from three-quarters of a penny to 10 1/2 cents - boosting it from one of the lowest rates in the country to the highest.

Morrisette and his allies hold that the revenue is needed to cover the rising costs associated with substance abuse in Oregon. They claim that as many as 75% of the inmates at Oregon's prisons committed crimes related to alcohol or drug abuse.

Paul Romain, executive director of the Oregon Beer and Wine Distributors Association, said, "The people that are pushing it are very well-meaning."

Romain said that the wholesalers he represents actually would profit because they add a percentage markup to their total acquisition cost.

"The reason the beer tax hasn't gone up in Oregon has nothing to do with me," he told the newspaper. "It's the Oregon brewer - nobody wants to tax the Oregon brewer. Eleven to 13 percent of all beer sold in this state is microbrew, which is astronomical (compared with other states). That's why the tax hasn't gone up."

He said that most of the opposition to a tax increase has come from brewers - primarily the big three of Anheuser-Busch, Miller and Coors, but also the microbreweries that could be affected. Oregon craft breweries rank second in the nation in production.

Morrisette's proposal exempts breweries that produce fewer than 200,000 barrels per year from the new tax. That would ease the pinch for most of the state's homegrown brewers. But its largest, Widmer Brothers Brewing in Portland, is above the exemption limit and Deschutes Brewery in Bend is close.

"We're under it for the moment, but we're rapidly approaching it," Deschutes President Gary Fish says. "If (a tax increase) comes up again, we will be opposed to it because we have to be - we don't have a choice.

"The whole thing won't raise much money ... and you'll devastate a homegrown Oregon industry. To me, the whole thing seems pretty absurd."

Published : Nov 13, 2006