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News Report

A hoppy balance to Hawaii’s alcohol tax

Beer drinkers pay a higher rate than wine or spirit drinkers in terms of alcohol per gallon, and tend to be working class folks.

in Tax Reform
Sampling beers in style at spinnakers

Representative Kaniela Ing plans to introduce a bill during the next legislative session that would cut taxes Hawaiʻi residents pay for beer by more than half, from 93 cents a gallon to 42 cents a gallon.

“While it may appear that beer is taxed at a lower rate per gallon when compared to wine or spirits, if you break down the amount of alcohol per average gallon of beer versus wine or spirits, beer drinkers are taxed at a much higher rate,” said Rep. Ing. “The goal here is to level out the taxes so that each type of alcoholic beverage is taxed equitably.”

Rep. Ing says he is not much of an alcohol drinker himself, and his proposed tax cut is simply a matter of class fairness.

“Working people tend to drink beer more often than other types of alcoholic beverages,” he said. “But today they are taxed more per ounce of alcohol than someone drinking wine. When you look at it that way, the current system is incredibly unjust.”

Compared to other states, Hawaiʻi’s alcohol taxes rank second highest for beer, 11th for wine and 23rd for spirits.

Ing believes this proposal makes sense from an economic and business standpoint as well.

“Hawaiʻi’s beer industry is growing and has resulted in hundreds of new jobs, diversified tourism and a stronger economy,” Ing said. “If you look at other states, this local industry has a lot of room to grow. We should encourage the growth of local business to allow them to compete in the national marketplace.”

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