SALEM, Ore. — Organizations representing producers of Oregon beer, wine, and spirits are sounding the alarm about a bill proposed in the legislature that would majorly hike taxes on alcohol.
House Bill 3296, sponsored by Democratic Representatives Tawna Sanchez and Rachel Prusak, proposes new taxes on beer, cider, and wine.
The bill proposes an additional tax of $70 per barrel of beer or cider and $10 per gallon of wine. The current taxes stand at $2.60 per barrel of beer or cider and 65 cents per gallon of wine, and the new taxes would be added on top of those existing rates.
Reps. Sanchez and Prusak reference the cost of addiction in Oregon as the impetus for the bill, citing statistics that the state's alcohol mortality rate has increased by 34 percent in the past 21 years, killing "five times as many people as all drug overdoses combined." The bill stipulates that tax revenues would go toward addiction recovery measures.
The Oregon Beverage Alliance and Oregon Wine Council both released statements this week in opposition to the bill, saying that it would be devastating to Oregon breweries, wineries, and distilleries already suffering from the impact of wildfires and COVID-19 closures.
“The idea of increasing the tax on small, local wineries that provide important jobs and tourism revenue to the state when we are just beginning to approach recovery from the current economic crisis is incomprehensible, let alone an increase of nearly 1700 percent,” said Sam Tannahill, Founder and Winegrower at A to Z Wineworks and Rex Hill winery. “As written, this proposal would potentially force most of Oregon’s prized wineries to simply shut down, as they would be unable to sustain their operations with this drastic of a tax increase.”
Both groups cited polls, conducted by the Oregon Beverage Alliance, that found 74 percent of Oregonians oppose alcohol tax increases.
“This appears to be the single largest beer, wine and cider tax increases ever proposed. If the goal is to kill the Oregon beer, wine and cider sectors, this bill is a great start," the Oregon Beverage Alliance said. "Beer, wine, cider and spirits are an essential part of Oregon’s economy and identity. House Bill 3296 would eliminate these local jobs with a nearly 3,000% tax increase on beer and cider and almost 2,000% tax increase on wine at a time when these businesses are battling a pandemic recession. This is tremendously insulting and would be an unprecedented blow to a sector that has put Oregon on the map."
The actual tax increase would be closer to 2,700 percent for beer and cider, 1,538 percent for wine. The Oregon Wine Council estimated that the bill would raise the cost of every bottle of wine sold in Oregon by more than two dollars.
“It is unfathomable to think that now is an appropriate time to increase any tax on one of Oregon’s homegrown industries that has suffered the most during the COVID-19 pandemic, let alone one of this magnitude,” said Scott Kelley, owner and winemaker at Paul O’Brien Winery.