Sen. Kevin Witkos, R-Canton, doesn’t believe proposing legislation that eliminates the sales tax on beer, wine, and liquor is a conflict of interest for him, despite being a tavern owner.
Witkos is proprietor of Wilson’s Pub in Collinsville with his wife, Esther. He said the legislation he’s proposing would only impact sales tax charged at grocery and package stores. He said the new legislation would have no impact on the sales tax charged by restaurants and bars.
“It’s not applicable to my business,” Witkos said Sunday in a phone interview.
Also, instead of introducing it as a General Law Committee bill where he’s the ranking Republican member, he made sure it was introduced as a Finance Committee bill.
“In order to make sure there were no improprieties, I made it a Finance Committee bill,” Witkos said Sunday.
The General Law Committee has jurisdiction over the state’s liquor laws. The Finance Committee deals with taxes.
Witkos said the six-week pilot program to exempt the sales tax would be revenue neutral because alcohol sales would increase and the revenue would be made up by the additional excise tax. Or at least that’s what he hopes will happen.
The one-sentence legislation doesn’t specifically spell out where in the process the sales tax exemption would apply. It says, “That the general statutes be amended to provide a pilot program allowing an exemption from sales tax on beer, wine and liquor from November 15, 2014, through December 31, 2014, to determine if such an exemption leads to an increase in consumer purchases.”
Witkos admits it would be an experiment, but he said it’s worth the risk.
He said Rhode Island just repealed its alcohol sales tax and it’s been a few years since Massachusetts repealed its sales tax on alcohol.
“If it’s within a 20-minute drive, Connecticut residents are still driving over the border to get their liquor, cigarettes, and gas,” Witkos said.
Witkos’ proposal comes on the heels of the state’s decision to allow package and grocery stores to sell beer, wine, and liquor on Sundays.
According to the latest report from the Department of Revenue Services, beer, wine, and liquor sales are down by about $3.05 million in 2013 when compared with 2012, a year in which there were only about six months of Sunday sales.
While Gov. Dannel P. Malloy felt allowing Sunday sales was a step in the right direction, he felt the state should be doing much more to lower the price of alcohol within its borders.
But last year, the General Law Committee squashed a proposal by Malloy to change how alcohol is priced.
Currently, the minimum price a package store can charge for a bottle of alcohol is a wholesaler-established-and-posted “bottle price.” In Connecticut, this keeps alcohol prices at smaller liquor stores in line with larger stores, who would otherwise be able to sell at wholesale discounts.
The governor has argued that the law causes consumers to pay more for alcohol in Connecticut than in surrounding states.
Revenue Services Commissioner Kevin Sullivan stated at a public hearing last February that the administration wants to address minimum pricing before it makes changes to the state’s alcohol tax rates. He said the fixed price was a subsidy to the alcohol market, which passes those higher prices onto consumers.
“I’m not going to sit here and tell you that taxes are not a factor,” he said.
Sullivan was a member of a task force that studied liquor pricing two years ago. He said everyone in that group would acknowledge that taxes play a role in the high price of liquor.