Locals Split on Alcohol Tax
Local business owners have called this tax - instituted last year - a double tax, which they say has been hurting business.
With three questions on this year's ballot, there are a number of different decisions voters are going to have to make. But none may be as divisive as Ballot question No. 1.
Question 1 asks voters if they want to repeal the alcohol tax, which was put in place last year when the sales tax was also increased. While the general sales tax went from 5 percent to 6.25 percent, there was previously no tax on the alcoholic beverages. Now the tax is 6.25 percent.
"We've definitely seen the effects," said owner of Pairings Wine and Food, Lori Gagne Pollock who just took over the store this past April. "We noticed a drop in sales in August and that was a direct impact, even though we're not right on the New Hampshire border it directly impacts us."
Since there's no sales tax or alcohol tax in New Hampshire a number of local business owners have said that they have lost a number of business because of the new tax.
"The net profits in New Hampshire are up," said Jason Alexander, owner of Winchester Wine & Spirits. "They're so blatant about it, they rub it in our face. People don't understand a sale in New Hampshire is not going to help Massachusetts. Why would people spend money in Massachusetts when they can drive a few minutes north and not pay."
Alexander explained that his sales are down 12 percent and has lost 13 weddings to New Hampshire.
"Those people want to stay here but they can't justify paying $600 in taxes for a wedding," Alexander said. "I had to let people go because of this."
However, State Senator Patricia Jehlen said that according to numbers from the Department of Revenue, Massachusetts generated $97 million in revenue from the alcohol tax. This number, Jehlen says is also $19 million more than what was estimated. According to the Senator, sales have also increased over the last three months.
"Question 1 would remove the sales tax on alcohol, which is dedicated to alcohol and drug treatment and prevention," Jehlen said. "Many of us know people who have been affected by drug and alcohol abuse, and many of them have been unable to get help when they needed it. Detox and treatment centers throughout the state have already been shut down and reduced and too many people detox in the most expensive and least effective facilities: houses of correction.
"While New Hampshire has no sales tax on alcohol, it has a state monopoly and has an excise tax on beer that is 4 times as much as ours."
The Committee to Repeal the Alcohol Sales Tax says the tax in unfair because it is a "double tax" since there is already an excise tax on alcohol. The money collected from the tax goes towards helping people with behavioral health problem.
Other items exempted from the sales tax are necessities, like food and clothing," Jehlen said. "Alcohol is simply not a necessity and therefore does not deserve a special exemption from the sales tax."
"Exemptions from the sales tax are intended for basic essentials like food and clothing up to $175," said State Representative Jason Lewis. "The sales tax on alcohol generates more than $100 million per year that is used for substance abuse and mental health treatment. If Question 1 passes, we will be forced to cut these programs and will end up paying more in social programs and prison costs."
Other politicians like Lewis' challenger – George Georgountzos (R-Stoneham) – agree with Alexander and Gagne Pollock.
"This tax is simply unfair because it is a tax on a tax," Georgountzos. "Alcohol is already taxed and this new 6.25 percent taxes the final price, which includes the excise tax that is built in to the price, much like the taxes on cigarettes. The American Revolution began because of tax policies like this. Moreover, the imposition of this added tax has had the net effect of punishing small businesses, particularly those near the New Hampshire border. The tax should be repealed because repeal will give small businesses a needed boost and bring a little bit of fairness back to our tax policy."
If passed, the repeal would go in place on Jan. 1.