Customers at Winona’s MGM Liquor are confronted daily with the potential consequences of a House-backed increase on alcohol taxes.
At the checkout lane, there’s a poster and flyers warning customers they will pay more — up to 600 percent more for beer — for taxes on liquor and asks them to contact their local legislators about it.
Then, when they leave, they see a map showing the proposed taxes for a 31-gallon barrel of beer compared with neighboring states.
The proposed increases are part of a $2.6 billion omnibus tax bill the Minnesota House of Representatives passed last week. If signed into law, the amount of tax on alcohol would double for some products like hard alcohol and sparkling wine, would increase six-fold for some kinds of wine and beer, and even more for others.
The companion bill in the Senate, approved Monday, doesn’t propose increases, so it’ll be up to a conference committee to decide whether or not to include them in the final bill.
The size of the increases are sobering, though they’re so large in part because the state hasn’t approved an increase since 1987.
As a few examples, tax on a six-pack of beer would rise about 40 cents, an average bottle of wine would cost about 35 cents more, and a liter of hard alcohol would increase about $1.50.
MGM owner Laimis Rimkus is not shy about his objection to the tax increase.
“I think it is ridiculous,” Rimkus said. “We are going to have to charge $3 to $4 extra for a case of beer. Who is going to pay that?”
Rimkus is not alone. Many other retailers in Winona have voiced their frustration with the tax.
Warehouse Liquor owner Darin Egeland said Winona residents would only have to drive a few miles to find cheaper drinks in Wisconsin, due to that state’s lower sales and excise taxes. He’s convinced a tax increase would have a huge impact on his sales and would drive customers away.
“This would kill all the sales in the border towns,” agreed Third Street Liquor owner Ken Sibenaler. “We can’t afford it.”
Sibenaler said liquor retailers are already hurting from reduced revenues and sales, due to the down economy. The tax increases would be another cost they would have to pass onto consumers, but couldn’t if they want to remain competitive.
If it becomes law, it would be the first increase on alcohol taxes in more than 25 years. The tax increase would outpace inflation since 1987, which has seen prices double.
“What is the government thinking?” Egeland said. “This increase outpaces inflation and then some. This is an obscene increase.”