Beer tax increase could fund law enforcement

The General Affairs Committee heard testimony March 4 on a bill that would increase the beer tax by 5 cents per gallon.

Hyannis Sen. Al Davis introduced LB653, which would increase the beer tax from 31 cents to 36 cents per gallon. Half of the increased beer tax revenue would be distributed to the Nebraska State Patrol Cash Fund and half to counties for law enforcement purposes based on sales reports filed by wholesalers.

Alcohol consumption contributes to many crimes committed in the state, Davis said, as 27 percent of the 83,455 arrests in 2012 were due to alcohol-related charges.

The bill would provide revenue generated from alcohol purchases to offset the law enforcement costs associated with alcohol-related offenses, he said.

Jason Payne, president of the Nebraska Craft Brewers Guild, testified in opposition to the bill. Nebraska has 18 craft breweries and that number is growing, he said.

“The tax increase would be a detriment to Nebraska’s growing brewery economy,” Payne said, adding that Nebraska already has the highest beer tax rate of any of its neighboring states.

Matt Stinchfield, owner of Ploughshare Brewing Company in Lincoln, also testified in opposition to the bill. In addition to paying an excise tax, he said, brewers also must pay federal, state, local, employment and property taxes and licensing fees and bonds.

“On an income versus tax basis, Nebraska brewers contribute more to state and local tax coffers than any other type of business,” Stinchfield said, adding that beer taxes make it very challenging for breweries to be profitable.

Hobert Rupe, executive director of the Nebraska Liquor Control Commission, testified in a neutral capacity. The commission collects alcohol taxes but has never taken a position on what the appropriate beer tax rate should be, he said.

No one testified in support of the bill and the committee took no immediate action on it.