So obviously Costco and I will be intersecting sometime this Friday. After all, they carry most of my preferred gins, including Dry Fly (a local distiller out of Spokane).
I'd heard that BevMo will be opening a store in Spokane but there's no mention anywhere on their website. Oh well.
However, searching for the new private liquor stores in Spokane led me here:
On the other hand, there were bottles galore of whiskey and tequila and vodka and all at positively amazing prices.
“Man, oh, Manischewitz!” I exclaimed. “Becoming an alcoholic has never been more affordable.”
Dan, a really friendly Costco employee I’ve known for years, noticed my hysterical giggling.
Rather than call a security guard, however, he took a moment to patiently explain what was going on.
The posted prices don’t reflect all the taxes and fees.
Those, he told me, would be added on once customers got to the checkout registers.
You know, things like sales tax and a 10 percent tax on gross receipts.
And some sort of sore loser’s payback fee.
And don’t forget the mandatory contribution to the Washington Senate’s Solid Gold Urinal Maintenance Fund.Now I hadn't looked too closely at Initiative 1183, mostly because I don't actually LIVE in Washington State. But this whole added taxes thing intrigued me, and that's what Google is for:
Washington voters approved Initiative 1183 last fall, taking the state out of the liquor business for the first time since Prohibition. The measure allows stores larger than 10,000 square feet and smaller stores in some areas to sell liquor.
Supporters touted the measure as a free-market reform that would give consumers more choices and lower prices. Those in favor included warehouse giant Costco Wholesale Corp., one of many big-box stores that can negotiate volume discounts for some products or sell their own labels more cheaply.
However, the initiative also imposed an additional 10 percent distributor fee and 17 percent retail fee on spirits to reimburse the state for millions of dollars in lost revenue. The result was higher prices for consumers at many retail outlets.And out of Oregon:
At the Rainier Liquor Store in Rainier, Ore., just across the Columbia River from Longview, owner Traci Brumbles says business has jumped 20 percent.
She told The Daily News (http://is.gd/HIXtz7 ) the hidden taxes that show up at cash registers in Washington — a 20.5 percent sales tax and $3.77 per liter tax — give her store a price advantage.Hmmm. Where's the particular language from the Initiative?
Turns out the legislature actually didn't mess with the language (I cross-checked fully). The initiative is full of strikethroughs and irritations; this is the Code as it stands:
(1) There is levied and collected a tax upon each retail sale of spirits in the original package at the rate of fifteen percent of the selling price.
(2) There is levied and collected a tax upon each sale of spirits in the original package at the rate of ten percent of the selling price on sales by a spirits distributor licensee or other licensee acting as a spirits distributor pursuant to Title 66 RCW to restaurant spirits retailers.
(3) There is levied and collected an additional tax upon each sale of spirits in the original package by a spirits distributor licensee or other licensee acting as a spirits distributor pursuant to Title 66 RCW to a restaurant spirits retailer and upon each retail sale of spirits in the original package by a licensee of the board at the rate of one dollar and seventy-two cents per liter.
(4) An additional tax is imposed equal to fourteen percent multiplied by the taxes payable under subsections (1), (2), and (3) of this section.
(5) An additional tax is imposed upon each sale of spirits in the original package by a spirits distributor licensee or other licensee acting as a spirits distributor pursuant to Title 66 RCW to a restaurant spirits retailer and upon each retail sale of spirits in the original package by a licensee of the board at the rate of seven cents per liter. All revenues collected during any month from this additional tax must be deposited in the state general fund by the twenty-fifth day of the following month.
(6)(a) An additional tax is imposed upon retail sale of spirits in the original package at the rate of three and four-tenths percent of the selling price.
(b) An additional tax is imposed upon retail sale of spirits in the original package to a restaurant spirits retailer at the rate of two and three-tenths percent of the selling price.
(c) An additional tax is imposed upon each sale of spirits in the original package by a spirits distributor licensee or other licensee acting as a spirits distributor pursuant to Title 66 RCW to a restaurant spirits retailer and upon each retail sale of spirits in the original package by a licensee of the board at the rate of forty-one cents per liter.
(d) All revenues collected during any month from additional taxes under this subsection must be deposited in the state general fund by the twenty-fifth day of the following month.
(7)(a) An additional tax is imposed upon each retail sale of spirits in the original package at the rate of one dollar and thirty-three cents per liter.
(b) All revenues collected during any month from additional taxes under this subsection must be deposited by the twenty-fifth day of the following month into the general fund.
(8) The tax imposed in RCW 82.08.020 does not apply to sales of spirits in the original package.
(9) The taxes imposed in this section must be paid by the buyer to the seller, and each seller must collect from the buyer the full amount of the tax payable in respect to each taxable sale under this section. The taxes required by this section to be collected by the seller must be stated separately from the selling price, and for purposes of determining the tax due from the buyer to the seller, it is conclusively presumed that the selling price quoted in any price list does not include the taxes imposed by this section. Sellers must report and return all taxes imposed in this section in accordance with rules adopted by the department.
(10) As used in this section, the terms, "spirits" and "package" have the same meaning as provided in chapter 66.04 RCW.
Retail I've marked in red, restaurants in blue, both retail and restaurants in orange, and why its collected at the cashier in bold.
Retail (assuming 1 liter for ease of calculation): 15% + (14% of 15%) + 3.4% + $0.41 + $1.33
So on a 1 liter bottle of rum or vodka retailing at $20 (just a random number) the additional taxes would be $3.00 + $0.42 + $0.68 + $0.41 + $1.33 = $5.84, or 29.2%
Restaurants also get screwed. Their tax on a 1 liter: 10% + $1.72 + (14% of (10% + $1.72)) + $0.07 + 2.3% + $0.41
So on the same 1 liter bottle at $20 (yes I know they probably don't play retail, just play along) the additional taxes paid on the restaurant would be $2.00 + $1.72 + $0.52 + $0.07 + $0.46 + $0.41 = $5.18 or 25.9%
Wow.
Now keep in mind, this is what the state-run liquor stores were ALREADY CHARGING. The only change the initiative instituted on the tax scheme was transferring the collecting of the taxes from the responsibility of state-run liquor stores to the responsibility of privately-run liquor stores.
Buyers in Washington were already paying these taxes on their liquor, they just weren't paying much attention. When the taxes are added at the cashier, people suddenly start paying attention.
The absolute genius I think of the initiative as it was written was that while placating the whiners with "the government will collect just as much tax as it did before" it's proponents managed to let the populace believe they would be paying less for liquor.
Not so, as it turns out.
It did, however, make the average liquor buyer in Washington actually pay attention to what Olympia had passed in the first place.
If the legislators in Olympia had any sense whatsoever (they don't of course) they wouldn't have let the taxes on liquor get this high to begin with. They'd also have struck part 9 from the books before any kind of liquor privatization had passed.
So now they've saddled retailers being forced by law to make a distinction between what the retailer is charging and what Olympia is taking in the form of taxes.
So a quick quiz for the Democrats holding the state house by 56-42, and the state senate by 27-22.
An initiative passed by the voters just went into effect. Liquor sales are now run by private companies instead of the state. What will happen in the first week?
A. Nothing. Nobody will do anything.
B. Maybe a few people will buy liquor, but not everyone.
C. Every cash-strapped 20-something in the state will run to Costco and buy liquor.
If you guessed C, you would be correct.
Your average 22-year-old male just tried to buy liquor at Costco. Giddy over the new prices, he walks up to the cashier and his bill is now 25% higher than the calculation he'd made. The clerk explains that it's the tax on liquor imposed by the state. What do you think he does?
A. Submits willingly to the financial reaming. After all, the state knows what's best.
B. Grumbles but accepts the price and promptly forgets what's going on.
C. Whips out his iPhone and asks Siri "what the fuck" and finds out how much tax is on a bottle of liquor. Decides it's the governments's fault. Develops a sudden distaste for the entire group of incumbents.
If you guessed C, you're right again!
Extra credit: it's June in a year divisible by 4. The above has just happened. There's 5 months til the election and the primaries have already taken place. You are the incumbent. What do you think happens on Election Day 2012?
A. No one will mention a word of this and my loyal electorate keeps me in office.
B. The challenger makes attack ads and a facebook page, but my loyal young and idealistic demographic only watches approved network news and never touches the internet so I'm safe.
C. All of the conservatives and libertarians in the Northwest grab some popcorn and watch the Democratic majority go down in flames as a whole new generation of libertarians uses Google and votes.
Hmm, I wonder....
Mel
