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Feb 13

Sinners Tax: PASSED

Did you write your congressman? As a non-Kentuckian, did you write our Kentucky legislators as a concerned shopper?

Sigh. Even if you did, apparently they didn't listen. The Alcohol Tax increase – 6% – was passed by the House and then this morning, the Senate. Now it just goes to Gov Beshear who already thinks it's a jolly good idea.

Passed

Here's the deal folks – Ky already has one of the highest alcohol taxes in the country. We pay 53% in taxes every time we buy a bottle of wine or a bottle of bourbon or beer. Now that number has been hiked to 59% and prices are going to increase.

Effects? Well, less people will cross from Ohio to buy alcohol over here. The liquor stores will feel the pain, but so will the restaurants, gas stations, and other small businesses that benefit from the influx of people.

Oh, but the 90 dry counties in Kentucky get to benefit from this tax even though they won't be feeling any of the pain.

Sorry folks, but my eloquence deserts me here. Kentucky pisses me off. I tried. I wrote every Representative and Senator. I heard back from only one. If you ask me, this is a bit of a Justice FAIL.

Ed. Note: I've updated the post to note that Kentucky currently has one of the highest tax rates in the country. I should not, by the way, have believed everything I read. ;-) Thanks to Kevin Keith for the clarification in the comments below.

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Posted by Michelle at 12:55 pm in Legislation | Permalink | Comments (5)

5 Responses to “Sinners Tax: PASSED”

  1. Dick Carlson says:

    Just curious — how does this compare to alcohol taxes in some of your neighboring states — like us over here in SC, for example? Is this a “suthern” thing?

  2. Gary OBrien says:

    Sorry, but I’ve got to disagree with you on this one….
    Coming from Alabama, where the state controls it all we have found the prices in both
    OH and KY to be much, much better. For instances, a bottle that in KY retails for about
    $10 would easily be $14 in AL. So, now it’s going to be about $10.20 or so? I will
    still take that over some really outrageous prices anyday of the week.
    Yes, I do agree that the tax rates on alcohol are absurd (we are post-Prohibition
    after all) but I certainly don’t think KY is near the top.

  3. kevin keith says:

    Gary,
    What you don’t realize is that while yes, Kentucky and Ohio are probably cheaper than AL, 1) because KY is an open market, and 2) because OH ranks much higher in total consumption per capita (even though they are a control state as well). However, the issues at hand are that KY is currently ONE of the highest alcohol tax rates in the US and that now, with the tax hike passing both houses, KY will be #1 in highest alcohol tax rates, and that the injustice of the fact that only 30 of the 120 counties in KY are “wet,” so only 25% of the counties in Ky are actually making the tax revenue to be divided amongst all 120 counties. This inequity is compounded by the fact that Northern Kentucky banks heavily on Ohio customers who cross the river from Cincinnati into Covington and Newport to purchase wine & spirits at a cheaper price than it would be in OH. The price gap between OH and KY will virtually be erased with this new tax hike. This will in turn induce the OH shoppers (our store counts on 80% of our business from OH) to remain in OH and spend their money there. This affects not only retail wine stores, but restaurants, gas stations, lottery sales, shopping centers, you get the idea. The folks down state have no idea of the economic dynamic in this part of the state because they are all insulated by the dry counties (I refer to Louisville, Lexington and Bowling Green). The end result, which they are striving to generate an additional $180 mil in taxes, will more than likely be considerably less or even in the negative due to stores closing and lost revenue from OH and even IN. Fun eh? The distilleries (think of what this will do to the Bourbon industry) and wineries here will suffer as well. It’s not just about “sin tax” – they are assailing the entire hospitality industry.

  4. I find it deplorable that Ohio residents would go to KY to buy any goods in the first place. It’s a disgrace for Ohio residents to turn their backs on superior establishments in their own superior communities, just so they can attempt to save a buck by going to someone who can play by a different set of rules. I say Ohioians should stay the hell out of KY and buy local. Besides, isn’t it the green thing to do?

  5. kevin keith says:

    Truth be told, Northern Kentucky and Cincinnati are part of the same metropolitan area. The Cincinnati International Airport’s abrreviation is CVG – which stands for Covington, which is in Kentucky. My store can see the Cincinnati skyline and is separated only by a river and a flood wall. The REAL argument is that the 50 different ways of doing business in this industry in the U.S. is MONUMENTALLY OUTDATED. This way of managing wine and spirits is antiquated and in desperate need of nationalization. However, the lobby on behalf of the wholesalers, who stand to lose everything if the three-tier system is abolished, have fought fiercely, and filled the coifers of countless state politicians to keep things intact. If you wish to see Ohioans shop for wine and spirits in Ohio, push for sweeping reforms to make this nation one uniform way of selling wine & spirits.

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