The Economic and Rural Development Policy Committee (ERDC) and the Revenue Stabilization and Tax Policy Committee (RSTP) met on successive days in mid October to discuss liquor excise taxes. The hearings and discussions were a continuation of attempts during the 2024 Legislature to increase alcohol taxes, allocate additional funds to alcohol abuse treatment programs, and radically alter tax collection methods.
While ERDC presentations by Premier Distributing and Total Wine noted that New Mexico’s current tax rates are among the highest of surrounding states, a presenter from Boston University School of Public Health, who has been active in raising alcohol taxes in other states, painted a dire and frightening portrait of alcoholic beverages. The discussion returned to a more realistic view of liquor when a UNM professor‘s presentation acknowledged that alcoholic beverages may have some positive health benefits and people like them. Alcohol also contributes to economic development in the state.
The highlighted text links to the presenters’ handouts.
Discussions during the RSTP meeting turned to what liquor excise tax reform might look like. A discussion draft bill was introduced and presentations by Rep. Micaela Lara Cadena, Rep. Joanne Ferrary, and Sen. Antoinette Sedillo Lopez delved into their respective proposals which would (together or separately):
- Move tax collection from the wholesale to the retail level on a per-drink basis.
- Impose a 3% tax on all beverages containing alcohol. This tax would be on top of GRT.
- Introduce a .20 per drink fee tied to a measurable decrease in alcohol related deaths. This “public health investment fee” would sunset after alcohol related deaths are cut by approximately 60 percent of the current rate for five consecutive years.
Download the presentations called:
The New Mexico Alcohol Alliance has joined other liquor industry leaders in adopting the following statements. The background and rationale can be found on a one-page PDF.
The New Mexico Legislature should:
- Maintain collection and remittance of liquor excise tax at the wholesale level.
- Direct all liquor excise taxes to programs.
- Specify that all liquor excise tax funds be used to match Federal Medicaid funds.
- Ensure that any increase in liquor excise tax be reasonable and not extreme.