Last year, when Hawaiian State Legislators were considering raising the taxes on alcoholic beverages across the state, those in the restaurant and tourism industry were outraged. Well, it's a new year and a new session and they are still upset. Unfortunately for them, it looks like the bill will pass.
The text (as amended) can be found here. The last recorded action was in conference committee with the house. Before that though, public comments at the House Finance Committee hearing saw a wave of businesspeople rising against the bill.
In essence, Senate Bill 741 raises taxes 20% on liquor sales in the state. That's a bump up from the current $5.98 a gallon of spirits to $7.18. Rates also would rise on July 1st for all other forms of alcoholic beverages.
Hawaii is in a unique position here. Other states would risk a loss of revenue from neighboring states if they jumped taxes up; although many probably want to. After all, times are tough and state governments are casting around for ways to get some money. For Hawaii, there are no neighboring states -- someone on the islands is going to purchase here or nowhere.
Will it cut down on sales (the main complaint of businesses)? Probably. Whether that is a good or a bad thing depends on which side of the line you're on. A less than $2 a gallon uptick isn't going to show up as more than a few cents per serving.
For all the storm and fury from the hotels, bars and restaurants, the bill will probably pass and become law. And then, it's on to the next target to meet the state's budget woes. And we do have budget woes -- a deficit of $200 million this fiscal year and a projected shortfall of more than a billion over the next two.
