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ARIZONA HOUSE OF REPRESENTATIVESFifty-fifth Legislature Second Regular Session |
House: COM DPA 5-3-1-1 |
HB 2627: ready-to-drink spirits products; tax
Sponsor: Representative Weninger, LD 17
House Engrossed
Overview
Defines ready-to-drink spirits products (RTDs) as a new type of spiritous liquor and provides for its sale, regulation and taxation.
History
The Department of Liquor Licenses and Control regulates the manufacture, distribution and sale of liquor in this state through the issuance of 21 license types or series. The series 10 beer and wine store license permits the sale of beer and wine, but no other kind of spirituous liquor.
A liquor tax is imposed on all producers and wholesalers who sell spirituous liquor in Arizona. The tax is paid by wholesalers when the spirituous liquor is sold and added to the sales price. For the purpose of taxation, wholesalers must report to the Department of Revenue (DOR) each month the amount of spiritous liquor sold. Additionally, all wholesalers of spirituous liquor are required to file a bond with DOR as surety for payment of taxes (A.R.S. Title 42, Chapter 3, Article 8).
In statute, distilled spirits is defined as including: alcohol, brandy, whiskey, rum, tequila, mescal, gin, absinthe, a compound or mixture of any of them or of any of them with any vegetable or other substance, alcohol bitters, bitters containing alcohol, fruits preserved in ardent spirits, and any alcoholic mixture or preparation, that may in sufficient quantities produce intoxication. Spirituous liquor is a broader term which encompasses everything in distilled spirits and additionally includes: wine, porter, ale, beer, any malt liquor or malt beverage and beverages containing more than one-half of one percent of alcohol by volume (A.R.S. § 4-101).
Statute prescribes the tax rates for each liquor type:
1) Spiritous liquor: $3 per gallon.
2) Vinous Liquor with High Alcohol Content: $0.25 on each container of 8 ounces or less having an alcohol content of greater than 24%. Containers exceeding 8 ounces are taxed at a rate of $0.25 per 8 ounces.
3) Vinous Liquor with Low Alcohol Content: $0.84 per gallon on each container with an alcohol content of 24% or less.
4) Malt Liquor: $0.16 on each gallon of malt liquor or cider (A.R.S. § 42-3052).
Provisions
1. Defines ready-to-drink spirits products as distilled spirits mixed with other beverages that: a) may contain flavoring or coloring materials and other ingredients; b) do not exceed 12% alcohol by volume; c) are sealed in an original container of not more than 24 ounces; and d) are sold in the manufacturer's original packaging. (Sec. 1, 3)
2. Applies, to RTDs, a tax rate of $1 per gallon on each sealed container of RTDs. (Sec. 4)
3. Directs wholesalers to pay the RTD tax and add that amount to the sales price. (Sec. 6)
4. Instructs craft distillers, who both manufacture and sell RTDs, to pay the RTD tax and add that amount to the sales price. (Sec. 7)
5. Specifies that the tax on RTDs applies to taxable periods beginning on and after the first day of the month following the enactment date of this act. (Sec. 8)
6. Includes RTDs to the list of liquors for which wholesalers must file a bond with DOR. (Sec. 5)
7. Requires wholesalers to include, in their monthly sworn statements to DOR showing the amount of liquors sold, the amount of RTDs sold in Arizona. (Sec. 6)
8. Specifies if a beer and wine store license and a bar license are issued at the same premises, that for the purpose of reporting liquor purchases, all RTDs are to be presumed purchased under the beer and wine store license. (Sec. 2)
9. Includes RTDs in the definition of distilled spirits. (Sec. 1)
10. Makes technical and conforming changes. (Sec. 1-7)
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HB 2627
Initials PRB/NM Page 0 House Engrossed
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