Regular readers of this site know I hold no love for the Pennsylvania Liquor Control Board and this state’s monopoly on wine and liquor sales. I’ve thought about starting a movement to get these things thrown out. It turns out I don’t need to, because someone else already has.
As part of this, he’s compiling a thoughtful and well-argued list of reasons the PLCB should be abolished. Here’s part of one reason — one that particularly gets my goat.
Reason #4: The Ridiculous 72-Year Old Emergency Tax
You may find this hard to believe, so here’s the proof, right off the PA Dept. of Revenue website. You’ll see at the bottom of the page that the cite is "Emergency Liquor Sales Tax Act, Act of June 9, 1936." The emergency has been over for 70 years, and of course, the money hasn’t gone to the citizens of Johnstown (or…the contractors hired to help the citizens of Johnstown) for many, many years: it goes to the General Fund. It’s just money the State is taking from you every time you buy booze.
The Emergency Tax is an amazing thing, kind of the creamy center of a towering cake of taxes Pennsylvanians pay when they buy booze. First, there’s the actual cost of the packaged beverage. The federal excise tax is added at the producer/importer level. Then the fun starts. The State imposes its set mark-up (for "profit", which in the case of so-called "control states" is really an additional tax, since it all goes to the State) of 30%. Now put that luscious Emergency Tax in there, adding 18% of the cost, the federal excise tax, and the 30% mark-up onto your bill. Think that’s rapacious? Wait, there’s more! That’s right, folks, now you get to add the 6% State sales tax (7% in Philadelphia County)! [Cindy’s note: and in Allegheny County as well.]
Let’s look at that. Say you get a bottle of 100 proof bottled-in-bond bourbon. Cost from producer: $10. Federal excise tax of just about $2.50 (it’s a set amount per gallon of 100 proof liquor; that’s why we bought bottled-in-bond):$12.50. The State’s mark-up of 30% is $3.75: $16.25. Now add the 18% Johnstown Flood Emergency Tax of $2.93 (note that it’s more than the federal tax): $19.18. Top it all off with the 6% sales tax you pay on computers, cars, books, pets, toilet paper (whoops — turns out PA doesn’t tax toilet paper; make that kleenex…which, believe it or not, was what I had there originally, and for some reason, changed it)– $1.15 — and you get a grand total of $20.33. That is more than twice the cost of the whiskey.