Alcopop Taxes Fizzle As Manufacturers Outsmart Lawmakers
Substance-abuse foes cheered last year when state officials cracked down on sweet, sometimes fizzy, intoxicating drinks such as Mike’s Hard Lemonade that — save for their alcohol content — bear a remarkable resemblance to soda pop.
The sugary beverages had long been taxed as flavored beers. But state authorities reclassified them as liquor, raising the levies on a six-pack by a factor of 16 to match the rate consumers pay on vodka, rum and other distilled spirits. The move was supposed to generate $38 million in annual revenue for the state.
Now the numbers are in: The state has collected about $9,000 since the new tax rate kicked in Oct. 1. Some officials and activists suspect fraud.
Beverage makers admit they aren’t paying the new taxes. They say they don’t have to because they have reformulated the drinks — more than 6,000 varieties — to transform them into simple beers by limiting the amount of distilled spirits they contain. They won’t explain how. The formulas, they say, are trade secrets. And beverage-industry officials and federal regulators say there are no tests to determine how much distilled spirits the drinks contain.
Kevin Drum is amused by this, as am I. He’s mostly tickled by the “brazenness” of the companies while my joy is derived from making the lawmakers look silly. Such is the nature of bipartisan consensus.
As an aside, I always presumed Zima and Mike’s were aimed at chicks, not kids.
Photo by Flickr user faeryboots, used under Creative Commons license.