Nebraska retracts 287% spirits tax hike plan – The Spirits Business

A proposed spirits tax increase of 287% in Nebraska will not go ahead after more than 1,500 letters were sent to lawmakers.

Nebraska governor Jim Pillen was considering providing property tax relief by increasing excise taxes on a list of 100 everyday goods and services, including a triple-digit hike on spirits.

Pillen was planning to raise the current excise tax rate for spirits from US$3.75 per gallon to US$14.50 per gallon.

However, the tax increase is no longer being considered following a grassroots activation by trade group the Distilled Spirits Council of the US (Discus) and coordination with local distillers and wholesale partners.

More than 1,500 letters were sent to legislators through Discus’ Spirits United campaign, which called on consumers and industry members to write to their senator to oppose the tax increases.

“Defeating this tax threat is a huge win for consumers, distillers and the hospitality industry,” said Adam Smith, vice president of state government relations at Discus.

“We’ve seen in other states how high taxes send consumers across the border as they search for better prices. However well-intentioned, this hospitality tax would have harmed local businesses and Nebraska consumers. We are grateful to the legislature for removing this increase from consideration.”

If the tax hike had proceeded, Discus said approximately 1,350 people would lose their jobs because of a more than US$110 million decline in retail alcohol sales, based on analysis by the trade body.

Furthermore, the new rate would have established Nebraska as the second-highest spirits tax rate among licensed US states.

The state already pays a high rate of tax on spirits. On a typical bottle purchased in the state, more than 44% of the retail cost already goes to pay a tax or fee of some kind.

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