Friday, June 8, 2012

Confused by new liquor prices?

There’s been a lot of news coverage surrounding the price of liquor this week. Did prices go up? Did prices go down? Are Washingtonians fleeing to the Oregon border to find the cheapest booze? While the long-term effects of liquor privatization remain to be seen, we can clear up some confusion regarding the new and not-so-new taxes and fees you’re seeing at the check-out stand.

Say you are picking up a ten dollar pint at your local grocery store. The taxes that you’ll pay are the same that they were under the state-run system.
    20.5% retail sales tax= $2.05
    .473 liters= $1.78 prorated liter tax

Here’s where things get tricky. Initiative 1183 adds two new fees: a distribution fee and a retail fee.
    10% distribution fee= $1.00
    17% retail fee= $1.70

These fees differentiate Initiative 1183 from Initiative 1100, which was defeated back in 2010. I-1100 raised concerns that revenue to state and local governments would dive, and therefore put public safety at risk. This time around the fees were included and Initiative 1183 was approved with nearly sixty percent of the vote.

So let’s do the math:
  • $10 bottle
  • $2.05 retail sales tax
  • $1.78 prorated liter tax
  • $1.00 distribution fee
  • $1.70 retail fee
  • $16.53 - Grand total

That’s an awful lot of math for a person to do on their fingers and toes. Under the previous system, state-run liquor stores posted the after-tax price. According to Representative Gerry Pollet, private distributors should follow suit.

“The public shouldn’t have to bring a calculator to know the actual price for liquor under our new law,” said Rep. Pollet. “The liquor taxes are much higher than the grocery-store-standard sales tax and it’s deceiving for shoppers.”

Rep. Pollet made his case for full disclosure of after-tax-and-fee prices on KOMO 4 Wednesday.  You can check out the interview below.

The Seattle Times has a price comparison on their website here. So far, price differences range from 10% cheaper to 34% more expensive compared to the state liquor store prices.

UPDATE: Many retailers will include the additional fees in the shelf price of the product and some may not. Be sure to check your receipt for a breakdown of any added taxes and fees.

To read this story in Spanish, click here.

Photo credit: Culligan1984 via Wikimedia Commons