Reality is sobering

Fri., June 8, 2012

Well, I have discovered a little more about Initiative 1183 that the voters might not have been aware of. The state collects a tax/fee for every bottle sold from the following: distributor, 10 percent wholesale tax; retailer, 17 percent retailer fee; customer, 20.5 percent retail sales tax; and a $3.77 per liter charge.

Neither the distributor nor the retailer is going to absorb those taxes/fees, so they get passed on to the customer. Assuming a 1.75-liter bottle was originally purchased from the manufacturer for $5, and assuming a 50 percent markup by the wholesaler and the retailer, that breaks down to the wholesaler making $2.50, the retailer makes $4.50 and the state collects from everybody $12.42.

So that $5 bottle ends up costing the customer $24.05. Now that is taxation Washington-state style.

Rick Lewis

Spokane

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