US: DISCUS slams New Jersey lawmakers over tax

18 June, 2009

US: The Distilled Spirits Council of the United States (DISCUS) has blasted the New Jersey state legislature for proposed tax increases.

According to DISCUS, the State proposes to raise the distilled spirits and wine taxes by 25%.

Jay Hibbard, DISCUS vice president, who noted that over 11,000 state hospitality jobs have already been lost over the past year due to the recession, said: “Putting a thousand more waiters and bartenders in the unemployment line is no way to shore up the State Budget.  “Policymakers need to understand that because alcohol taxes are already extremely high, any additional increase will hurt business and cost jobs across the hospitality industry -- waiters and waitresses, store clerks, busboys and bartenders.”

Nearly 60 percent of the cost of a typical bottle of spirits in New Jersey already goes toward taxes, Hibbard added.

The proposal to raise the distilled spirits and wine excise taxes by 25 percent would increase New Jersey’s tax rate from $4.40 to $5.50/gallon on distilled spirits and from $0.70 to $0.875/gallon on wine.  A recent economic analysis showed that the tax increase will cause New Jersey retailers to lose an estimated $60 million in retail sales and shed 1,000 hospitality sector jobs as a result.  

Hibbard added: “These hospitality businesses will see more of their customers traveling across the border to Delaware and Maryland to skirt the higher tax rate. When this happens, New Jersey will lose more than alcohol sales and taxes – the state will also lose the general business activity when some of these consumers fill their gas tanks, buy clothing or eat at a restaurant just across the border.

“In the depths of the worst recession in memory, I can’t think of a worse time for New Jersey politicians to punish the hospitality industry with higher alcohol taxes.”