Senate committee advances bill creating "mixed spirit beverages" category with excise tax

A Senate committee voted to give SB260A a favorable report after adopting a substitute and a tax amendment.

Sponsor Senator Singleton said the bill would create a new ready-to-drink alcohol category labeled "mixed spirit beverages" for products containing no more than 7% alcohol and would establish a licensing structure and a privilege (excise) tax on those products. The bill also requires suppliers of mixed spirit beverages to designate exclusive sales territories for each brand and to enter into distribution agreements with producers.

The committee first adopted the substitute that members had been given at the prior meeting; committee staff noted a single change on page 3 that updates a code section number. During debate the committee accepted a tax-related amendment described as an amount equal to 0.035 per ounce (presented in committee as 3.5 cents per ounce), which the sponsor and chair described as equivalent to about $0.42 for a 12-ounce can. The amendment was treated as friendly and passed by voice vote.

One committee member raised concerns that the new licensing and tax structure could reduce revenue that now flows to the Alabama ABC board, saying the potential loss of state revenue is "speculative" until sales performance is known and that the Legislature may need to revisit revenue impacts after a year of data. Other committee members and the sponsor said they expect continued conversations about enforcement and revenue.

After the amendment passed, a motion to report the bill favorably was made and seconded; the committee recorded the bill as receiving a favorable report.

The measure now moves on from committee with the substitute and amendment in place; committee members said they expect to monitor the revenue effects and could consider further action if collections fall short.