Alcohol is one of the most highly taxed consumer goods. But how does efficient tax collection help the consumer? The three-tier system has ensured the collection of billions of dollars in taxes at the local, state, and federal levels, thereby creating the world’s most reliable and cost-effective system of revenue collection.
This system of checks and balances means tax evaders and criminal enterprises can be identified and prevented from selling to consumers, and undercutting local retailers and small businesses – resulting in a healthy and thriving local marketplace for consumers to enjoy. This also means revenue collected by members of the alcohol industry gets reinvested in local communities to fund schools, law enforcement, and public safety initiatives.
With new avenues of sale and carve-outs to traditional sales methods in certain states, reliable tax collection has suffered. WSWA, in these instances, supports policies that seek alternative methods of sales and tax verification, to ensure a level playing field and fair marketplace. For example, WSWA supports practices such as reports by common carriers to state regulators regarding alcohol shipments into their state. This not only ensures the alcohol shipper is a licensed, known entity for consumer safety purposes, but ensures that the proper taxes are being paid on the products so that local retailers are not being undercut by tax evaders. This method has identified thousands of illegal shippers, and given states and ability to defend their consumers from them. This third-party verification is not as accurate as traditional methods, but is a viable answer to what has become widespread abuse of these carve-outs and tax evasion.