DISCUS

Officials Tempted By Alcohol Taxes

January 16, 2009 07:00 PM

State lawmakers are hoping alcohol will ease the pain of recession and budget deficits.

Politicians in Kentucky and Arkansas in the past week announced proposals to increase taxes on alcoholic beverages, echoing similar efforts in New York and California.

Higher taxes on beer, wine and liquor face stiff opposition from alcohol distributors, retailers and other industry groups. Lobbies have helped kill most efforts to increase alcohol taxes in recent years. Still, deep economic woes might make such measures easier to pass in 2009.

"This will be an extremely tough year" to stop state tax increases, said Peter H. Cressy, chief executive of the Distilled Spirits Council of the United States, a trade group.

Mr. Cressy said his group is aware of tax-increase proposals in about 10 states, and he expects the idea to spread to as many as 30 more by year's end. The group has begun coordinating battle plans with local restaurant and hotel trade associations.

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CONTACT: Telephone: SCROLLER Publication Name: Wall Street Journal Publication Author: David Kesmodel
 

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