STATE TAX UPDATE
- Tax Foundation Reports - How High are Spirits Taxes in Your State?: Compared to taxes on alcoholic beverages such as wine and beer, distilled spirits are taxed at much higher rates across the states, ostensibly to adjust for higher alcohol content. Today’s map shows how spirits excise taxes in your state compare. Data for this map comes from the Distilled Spirits Council of the United States. To allow for comparability across states, they use a methodology that calculates implied excise tax rates in those states with government monopoly sales.
- Washington state has the highest spirits excise tax rate at $32.52 per gallon, followed by Oregon ($22.75), Virginia ($19.93), Alabama ($18.27), and Utah ($15.38). Spirits are taxed the least in Wyoming and New Hampshire, where government-run stores have set prices low enough that they are comparable to having no taxes on spirits.
- Following Wyoming and New Hampshire are Missouri ($2.00), Colorado ($2.28), Texas ($2.40), and Kansas ($2.50). Like many excise taxes, the treatment of spirits varies widely across the states. Spirits excise rates may include a wholesale tax rate converted to a gallonage excise tax rate; case and/or bottle fees, which can vary based on size of container; retail and distributor license fees, converted into a gallonage excise tax rate; as well as additional sales taxes. (Note that this measure does not include general sales tax, only taxes in excess of the general sales tax rate.) Rates may also differ within states according to alcohol content, place of production, or place purchased (such as on- or off-premise or onboard airlines). See the chart here: https://bit.ly/2DQj6QX
- Nebraska's tax debate is heating up as a new version of Gov. Pete Ricketts's tax cut advanced from committee to be considered by the full legislature. The latest version scraps its original personal income tax rate cuts but still does nothing to make the bill more fiscally responsible. It cuts the corporate income tax rate and phases in a refundable tax credit for property taxes that would eventually grow to 20 percent of residential property taxes (with a $500 cap) and 20 percent of agricultural property taxes (with no limit).
- Florida Gov. Rick Scott toured the state last week to tout $171 million of unnecessary tax cuts and then returned to Tallahassee to sign into law a state budget that fails to keep up with schools' costs, does little to reduce waiting lists for state services, and draws down state reserves by $3.3 billion.
- Missouri legislators are on spring break this week but will be back to debate major tax legislation on Monday.
- Arizona lawmakers are considering bills to permanently extend Prop. 301, a six-tenths of a cent sales tax that was approved by voters in 2000. The funding stream, used primarily for education, is set to expire in 2021. But the Senate President says he plans to fast-track the extension through both chambers.
- Minnesota Gov. Dayton proposed last week that the state respond to recent federal tax changes by changing its starting tax point to federal adjusted gross income instead of taxable income, thereby avoiding tax changes to state deductions. The governor also proposes enacting a new personal and dependent credit for individuals making under $140,000 and expanding the Working Family Credit.
With multiple tax-cut proposals circulating in Iowa it can be hard to keep track of them all, but Iowa Fiscal Partnership's Tax Policy Kit helpfully summarizes the key issues and will be kept up to date with the latest developments, including a new breakdown of the proposed pass-through-income deduction. And as lawmakers debate further undermining state revenues through tax cuts, the House has voted to cut $11 million from state universities this year.
LABOR AND TIP-POOLING
- New York Times reports - Wage Theft in Restaurants: New York could soon join seven other states that have done away with the unjust policy of letting employers pay waiters, bartenders and other tipped workers less than the minimum wage, a move that would help lift thousands of low-income families out of poverty.
- In much of the country, tipped workers live in a parallel universe as far as labor law is concerned. Under federal law, employers can pay such workers as little as $2.13 per hour — a rate that has not changed since 1991 — as long as their hourly wages plus tips add up to $7.25 an hour. This discrepancy hurts workers by putting them at greater risk of wage theft, sexual harassment and other workplace exploitation — bosses can easily withhold or steal tips, especially from workers they don’t like or who refuse their propositions. These are hardly idle threats, as demonstrated by the recent allegations of abuse against prominent chefs and restaurant owners and the multimillion-dollar wage theft settlements workers have secured in recent years by suing unscrupulous employers. The Department of Labor’s wage and hour division estimated that nearly 84 percent of full-service restaurants it investigated between 2010 and 2012 had violated labor standards, including but not limited to tip violations. Most states, including many of the 29 that have a higher minimum wage than is federally required, maintain a subminimum wage for tipped workers, who number about 4.3 million nationwide. In New York City, the minimum wage for tipped workers at businesses with 11 or more employees is $8.65, compared with $13 an hour for other workers. Gov. Andrew Cuomo has directed his labor commissioner, Roberta Reardon, to hold hearings starting next month on whether the state ought to eliminate that discrepancy through administrative action.
- The restaurant industry asserts that raising the tipped wage would hurt small businesses, forcing some to close. Mr. Cuomo and Ms. Reardon should not be swayed by this scare tactic. While there is no doubt that bringing tipped workers up to the minimum wage could reduce profits for some businesses, the experiences of other states show it would not devastate the industry. Consider California. It has for decades required businesses to pay tipped employees the same minimum wage other workers get, yet the state has a thriving restaurant scene that includes everything from mom-and-pop taquerias to fine dining establishments — look no further than the heated debates in foodie circles about the relative merits of eating out in New York versus Los Angeles and San Francisco.
Maine: Lawmaker Calling for Investigation of Maine Dept. of Labor - The House co-chair of the legislature’s Labor, Commerce, Research and Economic development committee is asking for an investigation of the State Department of Labor’s new unemployment insurance payment system. Biddeford Democratic Rep. Ryan Fecteau says lawmakers have received numerous complaints about the system. Fecteau says he has heard from individuals who could not get through to the agency to file claims online or on the phone. Fecteau says he and other members of the committee have heard from current and former staff at DOL that there have been problems with implementing the new system.
FOOD & BEVERAGE
- Virginia: Richmond Convention Center hosts Food and Beverage Expo - The Virginia Food and Beverage Expo might appear in a foodie’s fever dream: 170 exhibitors showcasing the Commonwealth’s finest specialty foods, including meats, cheeses, peanuts, condiments, confections, baked goods, beverages, sauces, soups and seafood. But not even a dream will get consumers near Exhibit Hall D at the Richmond Convention Center on March 21st. It’s an industry-only event. And the bouncer is Virginia’s Department of Agriculture. The agency restricts admission to industry professionals because business is conducted on the floor. Producers meet one-on-one with trade buyers and culinary pros sampling products and placing orders on the spot. Every attendee gets the chance to see and taste what’s trending in specialty food and beverages. The Food and Beverage Expo also sponsors a prestigious competition. More than 50 products are entered in the Best New Product contest. Categories include, Best New Food, Best New Beverage, and Best New Product Overall.
Georgia: With new alcohol bill set to become Ga. law, old prophecies prove iffy - When Georgia lawmakers and lobbyists began making their arguments for expanding alcohol sales in the late 2000s, critics said Sundays are for praising God and that the number of drunken driving deaths and crashes would skyrocket. Sunday sales in stores finally won passage in 2011, but those same critics have used similar arguments in recent years to fight legislation to let restaurants sell alcohol earlier on Sundays. That legislation, Senate Bill 17, finally passed this month and now sits on Gov. Nathan Deal’s desk awaiting his signature.
New York: City airport workers’ minimum wage raised to $19 per hour - The Port Authority will raise the wages of more than 40,000 workers at all three New York City-area airports — boosting the minimum to $19 an hour by 2023, agency officials voted on Thursday. The employees, including cleaners, wheelchair attendants, baggage handlers, security and others, will get an initial boost in September, officials said. The minimum wage for airport workers at JFK and LaGuardia will go from $10.45 to $13.60 hourly, while workers as Newark will see their rates jump to $12.45 per hour. The rates will climb from there, and minimum wage at all three airports will be $19 by September 2023, said officials. The workers have been fighting for the pay increases for years, and often packed Port Authority board meetings to speak out for the raises.