DISCUS Applauds Arizona Bill Cutting Tax on Spirits RTDs

A bill to cut state-level taxes on spirits-based ready-to-drink cocktails nearly 60% was introduced in the Arizona House.  The Distilled Spirits Council of the U.S. applauded the introduction. saying: “It is past time for Arizona to do right by small businesses and consumers and provide fairer tax treatment for spirits RTDs.”

“These products often contain the same or lower amounts of alcohol than beer- and wine-based beverages, and there is no reason to treat these products differently. Despite growing consumer demand for spirits RTDs, our research shows that unequal tax rates have posed a significant hurdle for craft distillers looking to enter the market. HB 2769 would lift the burden of unfairly high taxes, allowing a growing local industry to continue to flourish,” said Adam Smith, vp-state government relations.

Currently, spirits RTDs in Arizona are taxed 18 times higher than beer RTDs in the state. This state-level tax disparity is on top of a federal-level tax disparity, where spirits RTDs are taxed at more than twice the rate of beer- and wine-based RTDs. Under the proposed bill, the state tax rate on spirits-based RTDs would be reduced from the current rate of $3 per gallon to $1.25 per gallon, or from 28.1 cents per 12 ounces to 11.7 cents per 12 ounces.