Increase of taxes on Vermonters by over 7 million dollars
Vermont Will Tax Beer
WCAX, Montpelier, Vermont – September 26, 2006
From Budweiser to Vermont’s micro brews, the cost of a six pack is going up. That’s because for the first time, the state’s six percent sales tax will be levied on beer.
“Here in Central Vermont a six pack is going to go up 45 cents that is going to be a noticeable increase. I think people are going to be very surprised because it is kind of like a sleeper deal,” said M & M Beverage Owner Gilles Moreau.
Vermont and a host of other states are joining forces because they are worried about losing tax revenue because of the internet. Folks are catalog shopping on line and many of those purchases do not include a sales tax.
“Internet sales are growing I think 25 percent,”said Mike Wasser of the Vermont Tax Department.
Because Vermont decided to become a member of the so called streamlined sales tax agreement, Vermont now will be able to collect taxes from out of state vendors who ship and sell goods here. No one is sure how much Vermont might collect – but it’s likely to run into the millions. “
A guy in my business believes we need to tax … to get tax on internet sales, because internet sales are killing us other ways so I think overall, it works,” said Moreau.
But the state’s grocers are worried about the new beer tax taking effect in January.
“This is an increase of taxes on Vermonters by over 7 million dollars,” said Jim Harrison of the Vermont Grocers Association.
There will be a beer tax because Vermont already taxes wine. Under the national streamlined tax deal, wine and beer must be labeled as alcohol.
“So legislators either had to repeal the sales tax on wine which they were not willing to do or tax both. They opted to tax both,” said Harrison.
It was three years ago when the Governor and the legislature decided to enter the streamline system. It was needed at the time they said because they were making changes to Act 68. That’s the fund that pays for education in Vermont.
“Our legislators looked at this determined in the long run. This would benefit the state. It would remedy these inequalities,” said Wasser.
Some taxes will go down. Vermont can no longer tax clothing over $110. But the biggest shock may come at the cooler, in part because of the computer.