February 15, 2014 in Opinion

Kent Fleischmann: Privatization of distilled spirits sales not going as planned

Kent Fleischmann
 

Lower prices and increased choices. That’s what Washington consumers thought they were getting when they voted to privatize the sale of distilled spirits in November 2011, taking the business out of the state’s hands and putting it into the private sector. But we’ve seen the exact opposite: skyrocketing prices while the state profits at everyone’s expense.

Before privatization, Washington had the highest level of spirits taxation in the country. Now, with added fees, spirits prices in the state are nearly five times the national average, placing an unreasonable burden on the consumers who approved privatization.

This excessive system of taxation is gouging residents and small businesses and hurting our local economy. Residents of Eastern Washington are being forced across the border in search of better prices, and they’re finding them. We cannot afford to boost sales in other states, while businesses right here in Washington are suffering.

Higher prices and lost business is not what Washington voters approved. On our backs, the state coffers have seen a large payout. In the first year of privatization alone, taxes and fees from distilled spirits sales generated more than $500 million for the state; $200 million more than the state needs to maintain the new system.

Struggling consumers cannot afford to continue to pay these out-of-control prices. It is clear that we need a change in Washington. We deserve to pay a price on par with what residents pay in other states, allowing consumers to purchase at local businesses.

The smartest, most effective way to substantially lower taxes on Washington consumers and community businesses is to reduce the sales tax on distilled spirits. Currently, we have a 20.5 percent sales tax on all spirits purchases, in comparison with the 6.5 percent rate for most other goods. This is in addition to the myriad of other taxes and fees applied to spirits in the state. It’s no wonder Spokane-area residents are flocking to other states for more affordable prices.

Reducing the sales tax on distilled spirits will encourage Washington consumers to spend their money here, at our small businesses, and allow them to thrive, creating jobs and generating the revenue Washington needs. It will keep money in the pocketbooks of consumers by ensuring fairer prices.

The people of Washington deserve better. A diverse group of consumers, community businesses and Washington stakeholders have come together to form the Washington Good Spirits Council, and we are a proud member. The council’s mission is to find a holistic solution to address this crucial tax issue.

Approaching this problem with a focus on the sales tax is a win-win for consumers and businesses and ensures the funding for our state and local governments will not be threatened. We must do something to alleviate the burden that’s been placed on the shoulders of our taxpayers and small businesses, and the time to act is now.

Kent Fleischmann is the owner of Dry Fly Distilling in Spokane.


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