LIQUOR, Small breweries and brewpubs
INTRODUCED BY: SB by Baker and 4 Democrats; HB by McKelvey
BRIEF SUMMARY: Amends HRS section 244D-4 to provide that effective January 1, 2015: (1) draft beer and beer produced by a small brewery or brewpub shall be taxed at 23 cents per wine gallon; (2) still wine and sparkling wine produced by a small winery shall be taxed at 59 cents per wine gallon; and (3) distilled spirits produced by a small manufacturer shall be taxed at $2.57 per wine gallon.
Amends HRS section 244D-1 to define “barrel” as a barrel containing not more than thirty-one gallons or wine gallons of liquor. Defines “small brewery or brewpub” as a brewery or brewpub that brews or produces not more than sixty thousand barrels of beer per taxable year; “small manufacturer” as a distillery that produces not more than _____ gallons of distilled spirits per taxable year; and “small brewery or brewpub” as a brewery or brewpub that brews or produces not more than two million barrels of beer per taxable year.
EFFECTIVE DATE: July 1, 2014; applicable to tax years beginning after December 31, 2014
STAFF COMMENTS: Currently, beer is subject to a state tax of $0.93 cents per wine gallon while draft beer is subject to a tax of $0.54, still wine is taxed at $1.38 per wine gallon; sparkling wine is taxed at $2.12 per win gallon and distilled spirits are taxed at $5.98 per wine gallon.
While the proposed measure would establish a reduced liquor tax rate for draft beer, beer, still wine, sparkling wine, and distilled spirits produced by a small brewery or brewpub, it is questionable whether the preferential rates proposed in this measure for will be construed as discriminatory as they would favor “locally brewers and brewpubs” as compared to products that are imported. If nothing else, lawmakers should secure a legal opinion as to the constitutionality of conferring a preferential rate for brewers and brewpubs located “in the state.”