FISCAL NOTE
Date Requested: March 28, 2025
Time Requested: 10:01 AM |
| Agency: |
Alcohol Beverage Control Administration |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 4032 |
Comm. Sub. Eng. |
SB934 |
|
|---|
| CBD Subject: |
Alcoholic Liquors and Beers |
|---|
|
FUND(S):
General
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
The bill as drafted would allow liquor products mixed with juice or flavoring in a can (a ready-to-drink cocktail or RTD - High Noon, Surfside, Mom Water, Sunny D & Cutwater) to be sold by any licensee with a $150 beer license. There are approximately 2743 locations that sell beer off-premises.
The WVABCA has 2970 active liquor codes and 2436 special order liquor codes for over 5406 liquor codes or products/configurations of liquor. The proposed low-proof liquor products in a can being granted to beer distributors/beer retailers are about 170 products out of the 5406 liquor products listed by the WVABCA.
The WVABCA operates the bailment warehouse for all liquor products in the state. The WVABCA has 182 retail liquor outlets that purchased the 10 years rights (2020-2030 - paid approx. $54 million all in for the 10 years - on average each store paid $296,703 for these rights) to sell liquor products in the state. Without the liquor products in the proposed bill, the 2030 rebid amount may not meet the projected amount and so may have a negative impact on revenue at that time.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
-875,000 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
The proposed bill creates a new Low Proof Spirits Tax on these liquor products in a can at $1.25/gallon versus the current 32% markup per case (usually with cans it is a 24-pack case with six 4 can-packs). There is currently no excise tax on liquor produced in West Virginia. WV has excise taxes for beer -18 cents/gallon, wine - about a $1 gallon, and cider - 22.6 cents/gallon.
As a comparison, the revenue generated by the mark up would be reduced by approximately 3/4 based on new tax rate. The proposed tax would be $1.25 a gallon or as WVABCA staff have estimated the new tax would be $2.81 for a 24 pack case of cans or $.47 per 4 pack of canned liquor products.
Using the current 32% mark up rate, WVABCA staff have estimated it would equate to $10.39 for a 24 pack of cans or $1.73 a 4 pack of cans. There is about 2.25 gallons in a 24 pack of cans which equates to about $4.62/gallon.
In 2030, the estimated negative revenue impact (assuming no growth in volume of sales to 2030) to the WVABCA for the almost 170 products for canned liquor products up to 31 proof granted to beer distributors/beer retailers would be a little over $875,000/year and over a 10 year period would be $8,750,000. Again the rebid revenue in 2030 may also be negatively impacted.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
Person submitting Fiscal Note: Anoop Bhasin, General Counsel on behalf of WVABCA
Email Address: Anoop.K.Bhasin@wv.gov