Mass. To Vote to Repeal Alcohol Tax

A fight is brewing in the Massachusetts State Senate. On Nov. 2, state residents will vote on a measure to repeal the state sales tax on alcohol, also known as “Question 1.”

In May 2009, the Mass. Senate voted to lift the sales tax exemption on alcohol, applying the 6.25 percent rate to all over-the-counter liquor sold in the state for the second highest liquor tax in the group of six New England states plus New York.

The revenue from the tax is earmarked to fund addiction recovery and family support programs, according to Mass. State Senator Steven A. Tolman.

“It’s a stupid vote, to vote to repeal the sales tax,” Tolman said. “[The tax] ensures accountability in the recovery system, so that people who are sick will be able to get help when they are in need.”

But liquor salesmen and others unhappy with the removal of the exemption mobilized quickly to repeal the legislation, pushing for November’s ballot question regarding the “Sales Tax on Alcoholic Beverages,” as it is formally called.

In 2010 alone, the Committee to Repeal the Alcohol Sales Tax has received nearly $400,000 in contributions from state liquor distributors and individuals, according to public records.

Liquor salesmen in the state said that the tax has forced them to make cuts and lay off staff, causing harm to the Mass. economy. Four Seasons Wine and Liquor’s owner Sean Barry said the tax forced him to lay off one full-time employee and cut back on seasonal workers. He now works longer hours and has stopped advertising his business in newspapers and on the radio.

“There’s a snowball effect,” said Barry, whose business gave $1,000 to the Committee to Repeal the Alcohol Sales Tax. “It affects other industries. I’m not spending money on advertisements like I used to, nor am I employing as many people.”

Liquor salesmen said that residents who live near New Hampshire often chose to cross the border to buy liquor rather than pay the tax, an opinion supported by Harvard undergraduates.

“I know people who have gone to New Hampshire to buy alcohol for cheaper,” said Andrew A. Parchman ’11. “It’s bad for the state of Massachusetts.”

But supporters of the tax said that the benefits outweigh the costs.

“Alcohol is not a necessity and doesn’t deserve a special tax break,” said Vic DiGravio, the president and CEO of the Association for Behavioral Healthcare and the co-chair of the Committee Against Repeal of the Alcohol Tax. He said that the state desperately needs federally funded abuse treatment programs in light of the economic downturn, and that the tax is an effective deterrent against underage drinking.

While the debate may be bitter outside of Harvard Square, local liquor salesmen said that the tax has hardly affected their business. “It’s the month of September, business is good,” said DOMA Liquors manager Arjun Kunwar, noting that Harvard students’ return to campus always causes an increase in alcohol sales.

Still, some liquor salesmen in Harvard Square are not pleased with the tax.

“I’d like that tax to disappear,” said C’est Bon Market and Liquors Manager George Sarkis.

—Staff writer Sofia E. Groopman can be reached at segroopm@fas.harvard.edu.