I write to you regarding the March 11 article by Steve Wilson concerning changes at the DOR's ABC division. There were a couple of factual errors to which I want to bring your attention. First, HB 997 absolutely does NOT reduce any taxes on wine and spirits. It actually RAISES the taxes by 18% and consumers should not stand for it! Please allow me to explain.
For providing the service of distributing wine and spirits, the ABC assesses a fee of 27.5 cents on the dollar (27.5%). This fee is consistent to the amount private companies charge for this service in other states. The Legislature would like to get out of the alcohol distribution business, but can't figure out how to make up the $80+ million dollars they make from being in that business through assessing the aforementioned fee.
Mr. Lamar's bill would pass that business on to a private company which would charge somewhere between 25 to 30 percent for performing that same service. In past years similar bills attempted to RAISE alcohol taxes by 27.5% in order for the State to continue making their $80 million dollars, only now for doing nothing. The public outcry from consumers not wanting prices to rise by nearly 30% killed those bills every time.
But this year, Mr. Lamar's bill simply lowered the proposed tax hike from 27.5% to 18% and it managed to pass the House. Fortunately, the Senate doesn't seem to want to raise alcohol taxes (prices) on the citizenry by 18% as the House seeks to do and hasn't brought the bill up for consideration. Consumers must keep their eye on the details of these bills. Lest, our politicians will surely seek to raise our taxes while telling us they are doing the opposite.
Secondly and not nearly as important, the ABC never proposed temporarily halting shipping of alcohol last July. Their backlog of deliveries has ranged from 8-12 business days since shortly after the outbreak of Covid-19.
They did propose a temporary halt to the placing of orders that would have served to clear the backlog and help permit holders to better navigate ordering from the warehouse inventory. Deliveries would not have stopped and no one would have noticed anything had it not been misconstrued by the public.
To be clear, the ABC's Liquor Distribution Center in Gluckstadt is in dire need of help. The Legislature has not kept up with the rising demand for product over the last 25 years. Thus, restaurants and liquor stores have been experiencing delivery delays during busy times of the year for more than a decade. This is not a new problem. The ABC is in need of equipment upgrades, additional warehouse space and additional employees in both the warehouse and office.
Consumers and the fifteen or so private companies that wholesale wine and spirits in Mississippi and the thousands of restaurants and retailers across the state deserve better. The legislature should either fully fund the ABC or, if it wants to get out of the delivery business, give up every penny that it currently makes for being in the business. Consumers and small business owners shouldn't foot the bill for the whims of the Legislature.
Scott Jackson is a Northside entrepreneur and owner of the Colony Wine Market and Colony Bistro in Madison.