Advocates Will Try Again for Large Tax Increases on Beer and Wine

Oregon has among the nation’s lowest beer taxes, but breweries and wineries have lots of friends in Salem.

(CJ Monseratt)

Get ready for another round of an ancient battle in Salem: Advocates say House Bill 3312 will soon drop with the details of the latest effort to raise excise taxes on beer and wine in Oregon. (The drinks industry killed a similar bill in 2021 and in many prior sessions.)

It’s easy to see why recovery advocates keep trying to raise taxes: Oregon’s got a drinking problem and taxes here are relatively low.

Currently, according to the Tax Foundation, Oregon’s beer taxes are 45th in the country. Wine taxes are 31st in the country.

Advocates, led by the groups Oregon Recovers and the Oregon Alcohol Policy Alliance, want to raise those taxes steadily over the next five years and devote the increased revenue to ratcheting back harmful consumption.

Under the plan, beer taxes would go from $2.60 per barrel in 2023 to $33.60 per barrel in 2028. An industry trade group that opposes the tax increase, the Oregon Beverage Alliance, notes correctly that the increase over five years is 1,200%. Tony Morse, the policy director for Oregon Recovers, describes the same increase a different way: The tax on a 12-ounce beer would go from seven-tenths of a penny to a little over 10 cents. He is also correct.

The proposed tax increase on wine is less dramatic but still large. It would go from 67 cents a gallon in 2023 to $4.42 a gallon in 2028. That, the Oregon Beverage Alliance notes, is a 500% increase. Morse points out that the increase would raise the tax on a 5-ounce glass of wine from 3 cents to 17 cents.

Again, both are correct.

Although the language of the tax increase has not yet been made public, proponents expect to have a powerful sponsor for their bill, state Rep. Tawna Sanchez (D-Portland), who, as co-chair of the Joint Ways and Means Committee, has the ability to fund or kill other members’ priorities. (Sanchez did not immediately respond to a request for comment.)

On the other side of the bill, the Oregon Beverage Alliance counts among its members the state’s beer, wine, cider and spirits producers as well as beer and wine distributors. Those businesses can be found in every part of the state and have long been a formidable force in the Capitol.

The Oregon Beverage Alliance notes that “Oregon is home to 400 breweries, 1,000 wineries, 1,400 vineyards, 70 cideries, 100 distilleries, 73 distributors and 10,000 restaurants.”

“Beer, wine, cider and spirits are an essential part of Oregon’s economy and identity,” the group said in a statement opposing the tax hike. “If the goal is to kill a key sector of our state’s economy and all the jobs that come with it, House Bill 3312 is a great start.”

Advocates counter with a public health argument, noting that Oregon’s rate of alcohol abuse is the fifth-highest in the nation and our access to substance abuse treatment services is 50th. They say raising the price of alcoholic beverages would reduce consumption and provide a funding stream—$177 million a year by 2028—for various public health, treatment and educational resources aimed at reducing the harm alcohol does (nearly 2,500 Oregon deaths per year and an economic cost of $4.8 billion, according to the Oregon Health Authority). The tax increase would sunset if the alcohol addiction rate falls to 5% from the current level of 12%.

Both sides will bring compelling arguments to the Legislature when HB 3312 debuts. They did so in 2021, when the industry submarined a proposed tax increase that also included raising the tab on spirits (this one doesn’t). They’ve fought off tax hikes many prior sessions—beer taxes haven’t risen since 1977, and wine taxes have gone unchanged since 1983.

So what might be different this time? “The conversation about alcohol is changing,” Oregon Recovers’ Morse says. “People are increasingly understanding the role it plays in the addiction crisis, and they want to solve the problem. We’re confident Rep. Sanchez’s bill offers solutions that lots of Oregonians will wholeheartedly support.”

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