Wine, Spirits Sales Tax Trimmed

There will be no more sales tax on wine and spirits beginning Dec. 1.

The new state budget approved by the General Assembly this week eliminated the tax on spirits and wine – but not beer -- until June 20, 2015. Wiping out the tax is an attempt to help liquor stores compete with neighboring stores in Massachusetts, which eliminated the sales tax on alcohol two years ago.

Rep. Jan Malik (D-Dist. 67, Barrington, Warren), a liquor store owner in Warren, has been trying for the past two years to wipe out the tax.           

“This is a win for the consumer as well as those liquor stores which have lost a lot of business to their competitors in Massachusetts,” said Malik.

“Yet more than just benefiting stores along the Massachusetts border, this will be an incredible shot in the arm for stores in communities along the Connecticut border, which should see an influx of customers from that state, where the 6.35 percent sales tax still applies to alcohol,” said Malik, a member of the House Committee on Finance that included the sales tax plan in the budget.

Eliminating the sales tax is coupled with an increase in the excise tax for beer, wine and spirits from July 1, 2013, through March 31, 2015. It is anticipated those changes could result in a revenue loss of about $1.2 million for the new fiscal year, barring an increase in sales volume in Rhode Island.

The excise tax on beer will rise from $3 to $3.30 per barrel (a few pennies on a six-pack of beer), from 60 cents to $1.40 per gallon for wine (about an extra 6 cents on a 750-millileter bottle), and from $3.75 to $5.40 per gallon of spirits.

Under the new budget plan, sales tax will still be charged on the purchase of beer.

The June 30, 2015, cutoff date, said Representative Malik, gives the state a chance to study the impact of the sales tax elimination over the course of nearly two budget cycles.

“That should give us enough statistical information to decide if this is a positive action, which I believe it is, or something that needs re-thinking,” he said.