What’s net impact on state revenue?

Thanks for the Dec. 31 article, “Privatizing liquor hasn’t brought price down.” I believe that the liter tax actually went up from $3.77 to $6.60 per liter but I may be incorrect. Regardless of this minor item, I believe the new situation actually brings a major tax increase to our state. Your article accurately says the 51.9 percent markup went away and was replaced by a 10 percent tax on distributors and a 17 percent tax on retailers. While the numbers are correct, it may seem to your readers that the two new taxes are less than the old tax. In fact, the new taxes are going to be much higher because they are not taxes on the cost of the liquor but on revenues of the distributors and retailers. The old 51.9 percent was a markup on the cost of the liquor to the state.

I would really like to see a follow-up article later this year on the actual net revenue to the state. When you consider that the old 52 percent markup on cost and the 20.5 percent sales tax and the liter tax were gross revenue to the state, which then had to pay the actual cost of the liquor and the operating costs of the distribution centers and the retail stores to get the net revenue to the state.

The state no longer has any operating costs for the distribution centers or the retail stores and has no cost for liquor but instead they get the 10 percent tax on the distributors revenue that has to cover the distributor liquor costs and their operating costs plus their profit. The retailer then pays a 17 percent tax to the state on revenue that has to cover the retail cost of the liquor from the distributor plus the cost of their store operations plus their profit. On top of all that the state still collects the 20.5 percent sales tax plus the new liter tax.

The bottom line question to the legislators is what is the net impact on the state revenue? Or, looking at it as a state citizen, how much did our taxes go up or down?

Tom Balt

Snohomish

Talk to us

More in Opinion

toon
Editorial cartoons for Friday, Sept. 22

A sketchy look at the news of the day.… Continue reading

FILE - Six-year-old Eric Aviles receives the Pfizer COVID-19 vaccine from pharmacist Sylvia Uong at a pediatric vaccine clinic for children ages 5 to 11 set up at Willard Intermediate School in Santa Ana, Calif., Tuesday, Nov. 9, 2021. In a statement Sunday, Nov. 28, 2021, California's public health officer, Dr. Tomas J. Aragon, said that officials are monitoring the Omicron variant. There are no reports to date of the variant in California, the statement said. Aragon said the state was focusing on ensuring its residents have access to vaccines and booster shots. (AP Photo/Jae C. Hong, File)
Editorial: A plea for watchful calm this time regarding covid

We don’t need a repeat of uncontrolled infections or of the divisions over vaccines and masks.

Flowers bloom on the end of a dead tree on Spencer Island on Monday, Aug. 28, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
Editorial: Restore salmon habitat but provide view of its work

Comments are sought on a plan to restore fish habitat to the island east of Everett with popular trails.

Comment: GOP ‘projection’ is slideshow of hypocrisy, deflection

Trump, of course, is guilty, but so are House Republicans desperate to ferret out elusive dirt on Joe Biden.

Arlington Mayor Tolbert has helped her region rebuild, grow

Arlington Mayor Barb Tolbert has implemented the best programs to help people… Continue reading

Johnson’s endorsements reason enough to earn vote for sheriff

Another week. Another death at the Snohomish County jail (“Man, 38, identified… Continue reading

Resumption of expanded child tax credit can fight poverty

The U.S. Census Bureau has released poverty data for 2022 and the… Continue reading

Comment: Musk is his CEO’s X-factor (and not in a good way)

Musk is the widely variable variable for the X chief executive who can’t make headway on advertising.

toon
Editorial cartoons for Thursday, Sept. 21

A sketchy look at the news of the day.… Continue reading

Most Read