By Shelby Sebens | Northwest Watchdog
PORTLAND – Brew masters in Washington are raising a cup tonight to Olympia as House Democrats have decided to drop taxes on beer.
A spokesman for the House Democrats confirmed Tuesday that the House Finance committee did not include the beer tax proposal – which was 50 cents per gallon – in legislation it passed. The proposed taxes were part of a larger budget plan that includes ending sales tax exemptions and extending taxes that are set to expire in July.
But Washingtonians might want to hold off on popping the bubbly, budget critics say. Though lawmakers have backed off some of the plans for tax increases in the state, the largest chunk – extending a business and occupation tax surcharge on companies that provide services (doctors, lawyers, architects) – is still alive.
“It looks like they’re doing a tactical retreat on the most obvious and unfair taxes,” Washington Policy Center Vice President Paul Guppy said.
According to the Associated Press, the budget plan still includes reigning in several millions of dollars via the business taxes.
The Washington Policy Center, a free market think tank, recently conducted an analysis with the help of the Beacon Hill Institute that found the tax plan would result in the loss of thousands of private sector jobs. Though not as many jobs would be lost now that the beer tax and other proposed taxes have been dropped, Guppy said the bulk of the problem is with the plan to extend taxes on businesses.
In 2010 the legislature enacted temporary sales taxes that were set to expire this July, including the tax for the aforementioned services. The Washington Senate, which is led by a coalition of 23 Republicans and two Democrats, has a different budget plan that includes no new taxes. The two chambers will have to figure out a compromise soon. The legislature is supposed to convene by the week’s end but will be going into overtime.
“It’s a contest of wills,” Guppy said. “Who is going to be more adamant?”
So far Washignton breweries are on the winning end.
And that will be good news to Peter Charbonnier, owner of Populuxe Brewing in Seattle. He would have been one of 200 small breweries that would have faced a new tax for the first time. They were exempt from the temporary sales tax set in 2010.
“I’d never be able to quit my day job,” he said, adding the small brewery just got up and running a few months ago. “We just wouldn’t be able to expand.”
Both the Senate and House budget plans have taken heat. The Columbian reports some skepticism over the numbers in the no-tax increase Senate plan. And Gov. Jay Inslee got some push back for unveiling budget highlights earlier this year that included tax increases.
Contact Shelby Sebens at Shelby@NorthwestWatchdog.org
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