A non-profit research institute is fighting to rid the sunshine state of a per drink tax which currently adds a surcharge to the retail price of any liquor, wine, beer or cider.
The watchdog organization Florida TaxWatch said the tax, which has been under scrutiny since its inception in 1990, is “burdensome and costly to state government, taxpayers and businesses.”
The Office of Program Policy Analysis and Government Accountability said the 16-year tax has proven difficult to enforce or track. In 2004, the OPPAGA, a special staff unit of the Florida Legislature, recommended the surcharge be modified or fully eliminated.
Harvey Bennett, communications director for Florida TaxWatch, believes there may be various reasons behind the difficulty to rid the state of a tax his organization considers unnecessary.
“I think part of it was 9/11 and the need to recover from that,” Bennett said. He also believes there were other policies that had a higher priority than the per drink tax but notes that “some of it is pure politics.”
The Florida House of representatives and Senate have made attempts to repeal the tax with bills in 2001 and 2005 which were never taken up. However, both have submitted bills to their respective chambers for the 2006-2007 fiscal years.
The surcharge affects more than 20,000 businesses, like restaurants, bars and nightclubs, that sell alcohol throughout Florida. Each business is required by law to document the type and amount of alcohol consumed at their business.
Buffalo Wild Wings Grill and Bar manager Darren Drown said their nationwide business uses computer tracking to accurately manage the seemingly overwhelming task of recording each alcoholic beverage sold.
Drown said the establishment has been paying the tax for some time now, but said “I don’t really have a problem with it.”
Florida TaxWatch said the average monthly payment cost to businesses is less than $200, making it impractical to acquire “more efficient electronic funds transfer for these payments.”
Without the use of electronic transfer, the task of processing those tax payments lies with the Florida Department of Revenue. The use of computer tracking accounts for the lessening degree of annoyance many businesses have with the surcharge.
However, other options are available to businesses to pay the fees assessed by the State of Florida. Companies may choose to have the surcharge removed from their wholesale invoices of alcoholic purchases instead.
Silver Slipper steakhouse manager Bill Kalfas said there is a better way for the state to collect a few extra dollars.
“They could have just changed the excise tax on wholesale and that could get rid of all of the confusion.”
This excise tax, which produces $596.2 million annually, is the surcharge assessed to the original purchase at the wholesale level. He said a small increase at this level rather than an “extra” tax would save both businesses and the state time and money.
According to Florida TaxWatch, the surcharge is expected to bring the state of Florida $49.3 million for 2006. Of this total, most will be placed in Florida’s General Revenue Fund.
Part of the money, $12.5 million to be exact, will be utilized to reduce substance abuse in children and adolescents. Gov. Bush, a supporter for the repeal, notes that canceling this tax will not harm the Children and Adolescence Substance Abuse Trust Fund, which is funded through a portion of these proceeds.
Bush said funding for the trust fund would come through a portion of what he considers the more efficiently collected excise tax on alcoholic beverages instead.
As a critic of the “by-the-drink” tax, Bush said, “The repeal of this ill-conceived and difficult to administer tax will save an estimated $51 million for 20,000 Florida businesses.”
For the state’s 2006-2007 budget, Bush recommended a repeal of the surcharge as well as a recurring $50.6 million reduction for an unspecified period.
Contact Greg Hazzard at email@example.com