This week, state legislators moved forward with a bill that would change the way Tennessee’s wholesale beer tax is structured.
The Beer Tax Reform Act passed through House and Senate local government committees and will now move to the House Finance Ways and Means Committee and the Senate Finance Committee, according to The Tennessean and FixTheBeerTax.com.
The legislation would change the way that tax is determined for wholesale deliveries, changing it from a price-based formula to a charge for the volume of beer sold.
Rep. Cameron Sexton, R-Crossville, and Sen. Brian Kelsey, R-Germantown, are sponsoring the legislation, which would maintain the current levels of funding that local governments get from the tax-at least initially, Rich Foge, president of Tennessee Malt Beverage Association, recently told Nooga.com.
Although the change seems to have full support from the beer industry, city and county leaders around the state are worried about revenues in the future, which have the potential to be less, because the revenue would be tied to sales and not price increases.
Hamilton County Mayor Jim Coppinger recently told Nooga.com that local leaders aren’t actively working against the bill, but he doesn’t want to see less revenue for the county.
Under current law, Tennessee gets a 17 percent tax on the price of beer sold to wholesalers.
The new law would make it so that there is a flat tax charge per barrel of beer, The Tennessean reported. A barrel is 31 gallons.
The new method would get Tennessee in line with the 49 other states and how they tax beer, according to the news release from BeerPulse.com.
In 2005, Tennessee had the fourth-highest beer tax in the country, also according to BeerPulse.
Since then, it has surpassed Georgia, Alabama and Alaska to become No. 1. And it’s 12 percent higher than Alaska, which is at No. 2, according to a news release.