Besides the Opportunity Zone bill, there is another tax issue that needs your immediate attention.
Legislators, many of them Democrats, believe the state needs to subsidize distillers by giving them virtually all the liquor tax collected on their products.
Currently when a distiller sells bottles of their own Oregon-made whiskey, bourbon or other distilled liquor in their tasting room they get the same pay as an OLCC liquor store owner. The amount is based on the price of the bottle and is about 17%. Distillers want to raise it to 45%, essentially obliterating what the state and local governments get to treat alcoholism, deal with deadly accidents, and care for family members hurt by the consequences of alcohol.
The increase is ONLY on the first quarter of a million of sales, but it means we’re ultimately paying that distillery $112,500 a year to sell their own product. The lobbyist for the industry said at the hearing for SB 1565 that the change in law is “to make tasting rooms economically viable.” (Listen here).
In a sample letter to their members, they call this “being able to add a full-time staff person and increase the compensation of the staff we have now.”
When did it become the state’s job to make any commercial business economically viable or to pay for their employees? We certainly don’t do it for bookstores or marijuana stores. Just as too many marijuana retailers emerged and many failed, the same is true for distillers, there are too many. There are 11 in the Distillery District of inner SE Portland alone. They have a very strange “one product” business model. Very few businesses survive with only one kind of product. Coach bags, marijuana stores, OLCC stores, jewelry and shoe stores – that’s about it. All but high-end stores, like Coach, sell not just their own but many other businesses’ products. When suggested that they be allowed to sell their own liquor at higher prices than the liquor stores if they need to make more money, they reject that immediately.
Despite our testimony and that of the recover community, the bill passed out of its first committee and is now in Ways and Means. Please email these five “deciders” of the legislature and remind them of why we collect liquor taxes. Ask them to reject SB 1565.
The timing of this is critical. We need these to be in email boxes this week.
Senator Betsy Johnson Sen.BetsyJohnson@oregonlegislature.gov
Senator Elizabeth Steiner Hayward Sen.ElizabethSteinerHayward@oregonlegislature.gov
House Speaker Tina Kotek Rep.TinaKotek@oregonlegislature.gov
Representative Barbara Smith Warner Rep.BarbaraSmithWarner@oregonlegislature.gov
Representative Dan Rayfield Rep.DanRayfield@oregonlegislature.gov
Rep. Smith Warner,
The state’s job is to hire teachers and foster care workers, DEQ, Department of Revenue and BOLI employees, forest firefighters and state troopers. Why would any legislator think we should also be paying to hire tasting room employees for distilleries? This is outrageous.
Oregon’s liquor taxes help pay for the very services liquor abusers require: treatment, policing and health care. That’s why we have those taxes.
If distillers are struggling to make a profit, they need higher prices or a more complicated business such as brew pubs have. Or maybe there are just too many of them.
Their business model is NOT a state problem. When they went into the business, they knew they would need to pay OLCC taxes just as they knew they would need to buy equipment and pay rent. When bookstores’ business model didn’t work, you didn’t leap in to help them. Newspapers are certainly struggling, should we hand them $112,500 on their first $250,000 of sales too?
Why are you considering SB 1565? The alcohol business should be treated like others. They owe certain taxes; they should pay them.
Please let SB 1565 die in Ways and Means.
If you are curious, here’s what distillers are being asked to do.
SB 1565 has a surprising list of supporters: Sponsored by Senators BEYER, MANNING JR, Representatives NOSSE, GOMBERG; Senators BURDICK, DEMBROW, FINDLEY, FREDERICK, GELSER, GIROD, GOLDEN, HANSELL, HEARD, JOHNSON, KNOPP, LINTHICUM, MONNES ANDERSON, PROZANSKI, ROBLAN, STEINER HAYWARD, TAYLOR, WAGNER, Representatives BOSHART DAVIS, BREESE-IVERSON, EVANS, FAHEY, HELT, LEIF, LIVELY, MOORE-GREEN, NATHANSON, WALLAN, WILDE, WILSON