By Cole Grant/UM Legislative News Service
HELENA – A bill in the Montana Senate would double the wine tax in an effort to boost revenue in the state as it faces a budget shortfall.
“With a minor increase, we create the opportunity to prevent deeper cuts to our schools, our communities, and essential services,” said Sen. Lea Whitford, D-Cut Bank, who’s carrying Senate Bill 191.
Ali Bovingdon from the governor’s office also supported the bill, and said this tax was built into the budget Democratic Gov. Steve Bullock proposed at the beginning of the Legislature.
Opponents of the bill outnumbered the backers at the Senate Taxation Committee Friday morning. The opponents ranged from small winery operators to consumers.
“What’s interesting is that this bill is attempting to help balance the budget problem that we have on the back of small businesses and consumers,” said Mona Jamison with the Wine Institute.
She added the tax is too specific and regressive, in that the tax would disproportionately affect those who buy less expensive wine.
As it stands, the wine tax is 27 cents per liter. The last change in wine tax was in 1985, which was about a 25 percent increase.
Unlike wine, beer and liquor are taxed based on how much a brewery or distillery produces. Most of the wine tax is put into the state’s general fund. The remaining 31 percent goes to the Department of Health and Human Services “for the treatment, rehabilitation, and prevention of alcoholism and chemical dependency.”
The bill’s fiscal note says the updated tax would increase the fund by about $2.5 million next fiscal year.
Cole Grant is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association and the Greater Montana Foundation.