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SB 378

LIQUOR TAX RATES

2025 Regular Session Introduced by Bill Sharer

SB 378 hikes state excise taxes on beer, wine, spirits, cider, and fortified wine by 20% starting July 1, 2025, boosting revenue and reducing alcohol harms.

action postponed indefinitely
#alcohol&drugs #taxation #other(gas #cigarettes #etc.)
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WeVote Research Nonpartisan
Bill Summary · SB 378

SB 378 — Liquor Tax Rates (summary)

Status: Action postponed indefinitely
Introduced: February 13, 2025
Subject areas: Alcohol & drugs; taxation

Main purpose

Raise state excise taxes on alcoholic beverages (beer, wine, spirits, cider, fortified wine) by 20% to (1) increase state revenues and (2) reduce excessive alcohol consumption and related harms.

Key provisions

  • Increase excise tax rates (proposed new rates shown):
    • Beer: from $0.41 per gallon → $0.49 per gallon (20% increase)
    • Wine: from $0.45 per liter → $0.54 per liter (20% increase)
    • Distilled spirits: from $1.60 per liter → $1.92 per liter (20% increase)
    • Cider: from $0.41 per gallon → $0.49 per gallon (20% increase)
    • Fortified wine: from $1.50 per liter → $1.80 per liter (20% increase)
  • Effective date: July 1, 2025 (per fiscal analysis).
  • No changes proposed to other excise categories beyond those listed.
  • Technical/administrative provisions follow existing excise tax collection mechanisms (no separate enforcement regime in the analysis).

Fiscal impact (as estimated by state revenue analysts)

  • Estimated increase in statewide revenue of approximately $4.6 million in FY2026 (first partial/initial year).
  • Revenue projections model modest consumption declines in response to higher prices; the Taxation and Revenue Department applied assumed price elasticities of demand of:
    • Beer: −0.11
    • Wine: −0.19
    • Distilled spirits: −0.20
  • Analysts assumed wholesalers pass through the tax by a factor of 1.5 to retail consumers.
  • Estimates reflect expected small declines in in-state purchases; fiscal risk noted if consumption shifts to neighboring states or online sources.

Who would be affected

  • Consumers: likely to face higher retail prices as wholesalers/retailers pass through the excise increase.
  • Wholesalers/retailers: administrative burden limited (collection remains via existing mechanisms), but retail volumes may decline slightly.
  • State finances: modest revenue gain intended for General Fund and possibly related programs; exact allocation depends on state budgeting.
  • Public health: small reductions in alcohol consumption projected, which proponents cite as a public-health benefit.

Policy context and considerations

  • Analysts cite New Mexico (state referenced in the fiscal analysis) as having elevated alcohol-related mortality and treatment gaps; the measure is presented in that context as both revenue and public‑health policy.
  • Research basis: the fiscal office relied on meta‑analytic elasticities (Wagenaar et al., 2009) to estimate consumption response. Projections acknowledge uncertainty — especially potential cross‑border or online purchases and substitution effects.

Procedural / timeline notes

  • Introduced February 13, 2025; effective date in the fiscal estimate is July 1, 2025.
  • As provided in the brief, current legislative status: action postponed indefinitely.
  • Related legislative items noted in the analysis (e.g., HB 417, HB 460, other Senate bills) reflect concurrent proposals addressing alcohol taxation/fees.

If you want, I can:
- Produce a short one‑page fiscal breakdown by fund/year using the estimates in the fiscal note, or
- Compare SB 378’s proposed excise increases to neighboring states’ current rates.

Compiled from official sources — confirm details with the bill’s official record.

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