Delaware Deliberates Alcohol, Tobacco Tax Increases

Democrats are looking to close the state’s budget shortfall by raising taxes on those products.

June 21, 2017

DOVER, Del. – To meet a $400 million budget gap, Delaware Democrats are turning to raising taxes on alcohol and tobacco products, including electronic cigarettes, the Washington Free Beacon reports. The tax hike would generate an estimated $18.8 million, and would take effect in September.

For alcohol, the proposed tax increase would add 12 cents to the current tax on a six-pack of beer (21 cents total); 15 cents for 750 ml of wine (34 cents total); and 15 cents for 750 ml of hard liquor (89 cents total). Tobacco products would also see a boost: cigarette packs would get a 50-cent tax hike ($2.10 total) and the tax on snuff would jump up by 38 cents (92 cents total). All other tobacco products would experience a higher tax rate of 15% to 30%. Electronic cigarettes would receive a new nickel per milliliter of fluid tax.

“I can’t imagine anybody’s happy about a tax increase, but we’ve got to get more revenue to avoid some of the cuts we’re talking about,” said Speaker of the Delaware House of Representatives Pete Schwartzkopf.

Both party leaders are confident the new taxes will be approved as part of the budget process. Gov. John Carney had been opposed to raising the alcohol taxes but had supported a $1-per-pack bump on cigarettes. However, Carney indicated he would okay these budget changes.

Not everyone’s thrilled about the new taxes. “There would not only be an immediate short time impact on the bottom line of our brewers, some of whom are struggling to make ends meet, but it would particularly affect new brewers coming into the state,” John Klein, president of the Delaware Brewers Guild, said.

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