NEW MEXICO (KRQE) – Lawmakers are trying to increase the state liquor tax. Experts said they haven’t raised the tax in 30 years.
“House Bill 230 proposes to increase and modify the liquor excise tax collected from a tax per liter gallon or barrel sold to a flat 25 cents per drink.”
Lawmakers said the goal of this is to reduce excessive consumption of alcohol in the state. They explained 25 cents is minimal compared to how much it costs taxpayers already to subsidize excessive drinking.
“It’s because it has such an enormous cost to our state, over 1.8 billion dollars. We are basically subsidizing the profits of alcohol industry and making it so that we have to absorb what those costs are, and plus, we’re suffering by losing lives and productivity. The message of the science is clear: alcohol taxes save lives. Alcohol tax increases like the one under consideration in this bill are good for public health and for the economy based on the evidence.”
Experts said they believe this tax increase will lead to a 7% drop in alcohol consumption in New Mexico. A majority of the revenue from the tax would go towards an ‘Alcohol Harms Alleviation Fund.’
Advocates said these types of taxes help to reduce alcohol-related deaths. They also nearly half—49%—of New Mexicans who don’t drink won’t be affected by this tax at all. Those in opposition to the bill argued that just raising taxes isn’t the answer to targeting alcohol abuse, and that it will hurt small businesses.
“It needlessly punishes very responsible adults, and it would harm local economies because while it’s less clear that this taxes proceeds will support evidence-based programming to address alcohol-related harms. This bill will all but ensure that many of New Mexico’s distinctive local breweries, wineries, and distilleries dry up completely,” said Sara Fitzgerald with the Greater Albuquerque Chamber of Commerce.
Experts said New Mexico is number one in the nation for alcohol-related deaths.
This bill passed the House Health and Human Services Committee on a 6 to 4 vote. It now heads to the House Taxation and Revenue Committee.
A Fiscal Impact Report for the bill finds that this tax increase would be substantial: 350% for spiritous liquors, 375% for wine, and 650% for beer and cider.