THE SENATE	S.B. NO.	1232
THIRTY-FIRST LEGISLATURE, 2021		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO LIQUOR.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that alcohol consumption contributes to hundreds of deaths each year in Hawaii.  According to the United States Centers for Disease Control and Prevention, there was an average of three hundred eighty-four alcohol attributable deaths per year in Hawaii between 2011 to 2015.  Of those deaths, approximately ninety per cent were due to excessive alcohol use, which includes binge drinking, heavy drinking, and any drinking by pregnant women or people under the age of twenty-one.  It is estimated that excessive alcohol use shortened the lives of those who died in Hawaii by an average of 27.2 years.

     Although it is often assumed that most excessive drinkers are alcohol dependent, one study found that ninety per cent of excessive drinkers did not meet the criteria for alcohol dependence.  The most common form of excessive alcohol use is binge drinking, which is defined as consuming four or more drinks during a single occasion for women and five or more drinks during a single occasion for men.  Heavy drinking is defined as consuming eight or more drinks per week for women and fifteen or more drinks per week for men.

     The legislature further finds that there are several short‑ and long-term health risks associated with excessive alcohol use.  The immediate health risks of excessive alcohol use may include injuries, such as motor vehicle crashes, falls, drownings, and burns; violence, including homicide, suicide, sexual assault, and intimate partner violence; alcohol poisoning; and risky sexual behaviors, such as unprotected sex or sex with multiple partners, which can result in unintended pregnancy or sexually transmitted diseases.  For pregnant women, excessive alcohol use may result in miscarriage and stillbirth or fetal alcohol spectrum disorders.  Over time, excessive alcohol use can cause chronic diseases and other serious problems including high blood pressure, heart disease, stroke, liver disease, digestive problems, certain types of cancer, a weakening of the immune system, learning and memory problems, mental health problems, social problems, and alcohol use disorders or alcohol dependence.

     In addition to the health risks associated with excessive alcohol use, the legislature also finds that excessive alcohol use contributes to significant economic costs to the State, including health care, lost productivity, and criminal justice costs.  According to a 2010 study, the estimated total cost of excessive alcohol use in Hawaii was $937,400,000 or $1.58 per drink, with the state government paying 39.4 per cent of these costs, which translate to $369,200,000 or $0.62 per drink.

     If the State assessed a 5 cent surcharge per 1.5 ounces of distilled spirits, five ounces of wine, and twelve ounces of beer, the projected revenue would total $32,000,000.  A 10 cent surcharge would result in projected revenues of $62,700,000.  Despite these projected revenues, a 10 cent per drink surcharge would only nominally increase costs for most individuals.  An individual who excessively consumes alcohol would pay nearly $27 per year as a result of the 10 cent surcharge whereas a non‑excessive drinker would pay less than $5 per year.  Individuals who abstain from alcohol would pay nothing.

     The purpose of this Act is to establish a three-year surcharge on the liquor tax.

     SECTION 2.  Section 244D-4, Hawaii Revised Statutes, is amended to read as follows:

     "§244D-4  Tax; limitations.  (a)  Every person who sells or uses any liquor in the State not taxable under this chapter, in respect of the transaction by which the person or the person's vendor acquired the liquor, shall pay a gallonage tax, which is hereby imposed at the following rates for the various liquor categories defined in section 244D-1:

     (1)  For the period July 1, 1997, to June 30, 1998, the tax rate shall be:

    [(1)] (A)  $5.92 per wine gallon on distilled spirits;

    [(2)] (B)  $2.09 per wine gallon on sparkling wine;

    [(3)] (C)  $1.36 per wine gallon on still wine;

    [(4)] (D)  $0.84 per wine gallon on cooler beverages;

    [(5)] (E)  $0.92 per wine gallon on beer other than draft beer; and

    [(6)] (F)  $0.53 per wine gallon on draft beer; and

     (2)  On July 1, 1998, and thereafter, the tax rate shall be:

    [(1)] (A)  $5.98 per wine gallon on distilled spirits;

    [(2)] (B)  $2.12 per wine gallon on sparkling wine;

    [(3)] (C)  $1.38 per wine gallon on still wine;

    [(4)] (D)  $0.85 per wine gallon on cooler beverages;

    [(5)] (E)  $0.93 per wine gallon on beer other than draft beer; and

    [(6)] (F)  $0.54 per wine gallon on draft beer;

and at a proportionate rate for any other quantity so sold or used.

     (b)  The tax levied pursuant to subsection (a) shall be paid only once upon the same liquor; provided [further] that the tax shall not apply to:

     (1)  Liquor held for sale by a permittee but not yet sold;

     (2)  Liquor sold by one permittee to another permittee;

     (3)  Liquor which under the Constitution and laws of the United States cannot be legally subjected to the tax imposed by this chapter so long as and to the extent to which the State is without power to impose the tax;

     (4)  Liquor sold for sacramental purposes or the use of liquor for sacramental purposes, or any liquor imported pursuant to section 281-33; and

     (5)  Alcohol sold pursuant to section 281-37 to a person holding a purchase permit or prescription therefor, or any sale or use of alcohol, so purchased, for other than beverage purposes.

     (c)  Beginning July 1, 2021, and ending June 30, 2024, every person subject to the liquor tax shall pay a $0.10 per drink surcharge on the liquor tax imposed under subsection (a).  The surcharge shall be based on 1.50 ounces of distilled spirits; five ounces of sparkling wine or still wine; and twelve ounces of cooler beverages, beer other than draft beer, or draft beer.  The proceeds from the surcharge shall be deposited into the general fund."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take on upon its approval; provided that this Act shall be repealed on June 30, 2024, and section 244D-4, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act.

 

 

 

Report Title:

Liquor Tax; Surcharge

 

Description:

Beginning July 1, 2021, establishes a $0.10 per drink surcharge in addition to the liquor tax.  Repeals June 30, 2024.  (SD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.