HB 213/a LIQUOR TAXES & DEFINITIONS

Rep Micaela Lara Cadena

Actions: [3] HHHC/HTRC-HHHC [9] w/o rec/a-HTRC

Scheduled: Not Scheduled

 House Bill 213 (HB 213) changes the rates of the Liquor Tax to a percentage and redistributes the tax revenue. HB 213 creates the Alcohol and Substance Use Harms Alleviation Fund and eliminates fortified wine as a distinct type of alcohol in the Liquor Excise Tax Act. 

 House Bill 213 (HB 213) imposes the Liquor Tax (tax) on retailers rather than wholesalers and provides an exemption. Retailer is defined as a person in the state who sells alcoholic beverages. The tax is not imposed if the retailer is a microbrewer, small winegrower, or craft distiller, if the beverage is produced by the retailer, or sold on the retailer’s premises.

HB 213 changes the tax rates to a percentage of volume per serving of beer and cider (2%), wine (3%), cider, spiritous liquors (4%) sold. 

Barrel is defined as 31 gallons. Fortified wine is deleted as a special rate and will be taxed the same as other wines. The bill clarifies that the tax is on the price paid for alcohol sold by wholesalers.

HB 213 creates the Alcohol and Substance Use Harms Alleviation Fund (fund). The fund is subject to legislative appropriation for alcohol and substance use harm prevention, treatment, and recovery services in the state and lands of Indian nations, tribes, and pueblos. 

HB 213 repeals the Local DWI Grant Program and transfers the balance of Local DWI Grant Fund to the new fund.

HB 213 distributes the tax revenue monthly as follows:
Drug Court Fund, $250,000 monthly;
General Fund, $2,084,000; and
Alcohol and Substance Use Harms Alleviation Fund, remainder of revenue.

If passed and signed into the law, HB 213 is effective July 1, 2025.
 

 The estimate tax revenue for Fiscal Year 2023 from Liquor Tax monthly distributions:
Drug Court Fund (5%), $206,250
Local DWI Grant Fund (45%), $1,856,250
Certain Class A Counties (flat amount), $20,750
General Fund (remainder of monthly revenue), $2,041,750

The current tax rates are based on flat dollar rates times volume sold based on type of beverage. Some volumes are measured in liters and some in gallons. The tax is imposed on wholesalers not retailers.
 

 Amended February 6, 2024 in HHHC:

HHHCa/HB 213: The House Health & Human Services Committee amends House Bill 163 as follows:

In Section 1 Subsection A (page 2, line 18) The House Health & Human Services Committee changes the distribution to the fund of Liquor Tax from $2,084,000 to the amount collected less the distribution to the Drug Court Fund.

In Section 5 (page 13, lines 8-11) are struck. The distribution from the fund is limited to the following:
The appropriation subject to legislative action is limited to 50% (instead of 100%) and $500,000 is appropriated to the Indian Affairs Department (IAD) to contract for services in equity-based research to study the effects of tax policy on alcohol and substance use across demographics including race, gender, sexuality, age, and socioeconomic backgrounds. IAD will report annually to relevant legislative committees.  An annual distribution in the amount of 10% is appropriated to IAD to fund culturally relevant alcohol and substance use disorder services and programs for Native American population in the state. 

Additionally, 40% of the money in the fund is to be distributed to counties based on the 10-year average of alcohol-related injuries and deaths. 
 

 HB 213 is related to HB 179, HB 212, HB 217, and SB 147.