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Maryland Politics
Posted at 02:17 PM ET, 03/30/2011

Md. Senate approves alcohol tax increase

The Maryland Senate voted 27 to 19 Wednesday to raise the state sales tax on alcohol in each of the next three years, a plan that would take the levy up to the same level as the District.

The bill is projected to raise $85 million a year by the time it is fully implemented, and the bulk of the proceeds would initially go to public schools in Prince George’s County and Baltimore.

The Senate on Tuesday approved its version of the state budget, which spells out how the new money would be spent next year. That spending is contingent on the separate tax bill that passed Wednesday also being accepted by the House of Delegates and signed by Gov. Martin O’Malley (D).

The tax bill calls for the sales tax on alcohol to rise from 6 percent to 9 percent over the next three years.

Supporters said the measure would help address some important budget needs and was also a positive step for public health, reasoning that the higher taxes on alcohol would cause people to drink less.

“When this bill is fully implemented, it will save lives,” said Sen. Richard J. Madaleno Jr. (D-Montgomery).

Opponents argued that the bill would be bad for Maryland businesses, and that the tax increase would hit low-income people the hardest.

Maryland lawmakers last increased taxes on alcohol during a 2007 special session as part of a broad-based increase in the sales tax from 5 percent to 6 percent.

It has been decades since Maryland has raised an alcohol-specific tax, however. Excise taxes on beer and wine were last increased 38 years ago, while the levy on hard alcohol was raised in 1955.

By  |  02:17 PM ET, 03/30/2011

 
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