State Liquor Board Forces "Stealth Tax" on Hospitality Business, Consumers

HARRISBURG, PA – The Distilled Spirits Council today protested the Pennsylvania Liquor Control Board’s decision to increase its fees which will hike the price of wine and distilled spirits across the Commonwealth – an increase the Council dubbed a “stealth tax” that will cripple Pennsylvania’s struggling hospitality industry and pick the pockets of unwitting consumers.

“The PLCB’s decision to jack up fees on wine and spirits amounts to taxation without representation,” said Frank Coleman, Senior Vice President of the Distilled Spirits Council of the United States. “This ends up being a major tax for consumers and will punish employees of struggling hospitality businesses – especially those who wait tables and serve drinks. We urge the PLCB to roll back this measure that will only further damage the hospitality industry during the worst economy since the Great Depression.”

Beginning January 1, 2011, the PLCB will raise the “handling fee” for all wine and distilled spirits products sold in the Commonwealth, effectively imposing around a $1.00 increase in the purchase price of a bottle of distilled spirits.

“At a time like this, raising fees on hospitality businesses is just terrible public policy,” Coleman added. “The PLCB should seriously consider cost-cutting measures and other efficiencies rather than taking the easy way out by unloading the burden onto consumers. If it really costs $2 to move one bottle from the state warehouse to the liquor store shelf, then the state has some serious operational problems.”

Coleman pointed out that in Pennsylvania, over 60 percent of the purchase price for a typical bottle of spirits goes toward taxes, fees and markups. A recent economic analysis showed that in the city of Pittsburgh, for example, consumers already face a staggering 7 different direct taxes each time that they purchase a bottle of spirits: Federal Excise Tax ($13.50/proof gallon), State Mark-up (30%), State Excise Tax (18%), State Handling Charge ($1.20/bottle), State Sales Tax (6%), Local Sales Tax (1%) and the Onorato Drink Tax (7%).

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