The Washington Post

Senate budget writers back tax increase on alcohol

Even as Maryland House lawmakers moved Thursday night to pass their version of a $14.6 billion budget blueprint without a broad-based tax increase, Senate budget writers were taking a somewhat different tack.

A key Senate committee on Thursday backed the state’s first increase in an alcohol specific tax in decades. The bill, approved on an 8-to-4 vote by the Budget and Taxation Committee, would gradually raise the sales tax Maryland residents pay on alcohol from 6 percent to 9 percent, eventually generating about $85 million.

The liquor-specific tax would be the first in forty years in Maryland, according to advocates, in part because of opposition from the powerful alcohol industry.

In the District of Columbia, the tax on alcohol purchased in retail stores is 9 percent; D.C. residents pay 10 percent on alcohol consumed in restaurants and bars, according to legislative analysts.

Most of the money from the proposed tax increase in Maryland would go to the state’s general fund, but about $5 million in the first year would pay for services for people with developmental disabilities.

The measure has the backing of Senate President Thomas V. Mike Miller, Jr. (D-Calvert), but must also win support from the House.

Senate budget writers included some incentives designed to make the sales tax increase on alcohol more appealing to House lawmakers from Baltimore and Prince George’s County: There’s an extra $9 million for Prince George’s and up to $12 million in teacher retirement funds for Baltimore contingent on the passage of the alcohol tax.

Ann covers legal affairs in the District and Maryland for the Washington Post. Ann previously covered state government and politics in California, New Hampshire and Maryland. She joined the Post in 2005.


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