It's 'crazy to try to increase taxes during an election year'

By SEAN ELLIS

Capital Press

NAMPA, Idaho -- Wine industry leaders were happy to hear a prominent lobbyist say he doesn't expect a strong push to raise the state's wine and beer taxes during the next legislative session.

"I haven't heard any momentum on that yet," agricultural lobbyist Roger Batt told Idaho Wine Commission board members during their regular monthly meeting in July.

While that's subject to change if the political winds shift, "I think anyone would be crazy to try to increase taxes during an election year," he said.

In light of an attempt two years ago to triple Idaho's wine and beer taxes, Batt's had great news for Idaho's burgeoning wine industry, said IWC Executive Director Moya Shatz.

"The wine industry is a growing industry in this state," she said. "Anything that would hinder that growth is bad."

With state budgets facing increased pressure because of declining revenue, the industry has been leery of another attempt to substantially increase wine and beer taxes.

A bill that would have more than tripled state beer and wine taxes was introduced in the Idaho Legislature two years ago and was backed by Keith Allred of The Common Interest, a government watchdog group.

Allred, who ran unsuccessfully for governor last year, argued that the increase was necessary to offset some of the state's substance abuse costs and pointed out Idaho's wine and beer taxes haven't been increased since 1971 and 1961, respectively.

The legislation would have raised Idaho's wine tax from 45 cents per gallon to $1.56 and the beer tax from 15 cents to 52 cents per gallon.

Shatz said that type of increase would be catastrophic to the wine industry, especially smaller wineries.

"It would put some small wineries out of business," she said. "That's a huge, huge increase."

The bill was defeated but wine industry leaders were concerned a similar push could be attempted during the 2012 Idaho Legislature.

In an editorial last year supporting an increase as a way to fund substance abuse programs, the Times-News of Twin Falls said it's likely the issue of raising the state's beer and wine taxes will return.

Batt said the state's wine industry is already heavily taxed and pointed out wineries also pay a federal excise tax of at least $1.07 per gallon, a $300 annual license fee and a $100 fee for every premise they sell wine by the drink. That's in addition to local and county fees.

"This industry feels it is already taxed enough," he said. "They pay their fair share of taxes."

He also said it's unfair to tax wine producers more to fund substance abuse programs.

"The real substance abuse issue out here in Idaho is meth," he said. "You don't see people on the street corner with a bottle of 1998 Cabernet."

Shatz said that if there is another proposal to raise wine taxes, the industry would like to be included in the debate, something that didn't happen last time.