Wednesday, December 14, 2011

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A Blow to Craft Distilling

A decade ago, fewer than one hundred legal distilleries operated in the United States. Today, it’s four times that number as new American distilleries have leapt from success to success. But in Washington State, a hotbed of craft distilling, there’s a real fear that this burgeoning industry just suffered a crippling setback.

Initiative 1183 passed last month with the dual intent of closing state-run liquor stores and allowing private retailers to sell spirits. The tax benefits were projected into the tens of millions of dollars. But its recent interpretation by the Washington Liquor Control Board has left some distillers wondering, rightly, whether their businesses will survive.

Writing in Monday’s, Josh Kerns reports
Initiative 1183 adds a new 27 percent tax on liquor in addition to the current state liquor taxes of 20.5 percent, plus $3.77 per liter, according to [Orlin Sorenson co-founder of Woodinville Whiskey Co.].

Those new taxes include a 10 percent distributor fee and 17 percent retailer fee, which "result in one of the highest liquor taxes in the country," says Sorensen. "That's virtually our entire profit margin."
Sorensen has put it to his fellow distillers in the Washington Distillers Guild that they “need to remind the liquor control board that the voter's intent of 1183 was to privatize liquor, not raise taxes and fees on craft distillers and handcuff them from doing business in the state.”

Please, Washingtonians, raise a ruckus. Now. Today. Call your representatives, write letters and emails. Let them know that in misinterpreting this act, the Washington Liquor Control Board has set the stage to kill jobs and crush local businesses under tax schemes that were never the intent of Initiative 1183.

For more details from Kerns, see his original article here.

Keep tabs on developments in the forums of the Washington Distillers Guild here.


Sylvan said...

Not to mention that apparently the State has stopped buying liquor, because they need to sell off all their stock before next May. But Costco and the new grocery stores can't buy liquor until then. If you are a small WA distiller, you basically can't sell your product in state for 6 months. If I understand this correctly, ouch.

Matthew Rowley said...

Just when politicians across the board and desperately trying to create jobs, here's a deal that seems like it's going to kill off some businesses. Six months with no sales? That's a hard nut to swallow.