For sake of brewery jobs, please don’t raise state sales tax on alcohol | READER COMMENTARY
For The Baltimore Sun|
Feb 10, 2021 at 8:04 AM
This last year was challenging. My heart goes out to the more than 460,000 Americans, including the more than 7,000 Marylanders, who have lost their lives to the COVID-19 pandemic. These individuals are mothers and fathers, sisters and brothers, friends and neighbors, and we mourn their loss.
Patuxent Brewing Company is a small, three-barrel, nano-brewery and is the first craft brewery within Charles County. We are one of the very few 100% Black-owned breweries in the state of Maryland. Along with my business partner, Davie Feaster, we started building Patuxent Brewing in 2017 with a vision to help connect communities, and we opened our doors in 2019. Our vision is that our brewery could be an epicenter to unite small businesses, and we put our hearts and livelihoods into our business.
I appreciated that The Sun’s recent editorial (”Alcohol tax hike: a penny that saves lives,” Feb. 3) acknowledged, “These are, indeed, tough times for bars and restaurants.” In addition to these businesses, Maryland’s brewers have also faced a brutal past 10 months because of the COVID-19 pandemic. Even though necessary to keep our employees and customers safe, the limitation on sales in our taproom meant we did not meet our profit projections in 2020. We also hand-can our beers, but canning means additional costs as aluminum cans have become more scarce during the pandemic, and the tariff on imported aluminum has increased the costs for all aluminum.
Unfortunately, the Patuxent story is not unique. According to the economic firm John Dunham and Associates, last year, the COVID-19 pandemic resulted in a more than $540 million decline in retail beer sales in Maryland. Because of the pandemic, our state is seeing a more than $400 million drop in wages that depend on the beer industry which has cost Maryland more than 11,000 jobs supported by our state’s beer industry. Some legislators are now talking about increasing the taxes on our state’s beer industry.
On Jan. 27, the Maryland Senate Budget and Tax Committee heard a proposal to raise taxes on our state’s brewers. Like many Marylanders, keeping my business running prevented me from participating in person. But as our state senators consider whether or not to pass this proposal, I hope they will take to heart the impact raising taxes will have on small brewers like me and future underrepresented, yet talented brewers.
Maryland’s beer industry is one of our state’s crown jewels. The last decade saw incredible growth in the number of breweries in Maryland. These breweries revitalize neighborhoods, provide a place for us to gather, increase charitable giving and have been a critical part of our state’s economic success. Maryland already taxes alcohol twice: first with an excise tax, which Maryland businesses pay when products arrive or are made in the state, and second, consumers pay a 9% sales tax applied to alcohol at the point of sale. This rate is already 50% higher than the 6% rate applied to every other item we pay a sales tax on in Maryland.
As Marylanders, we compete with brewers in the state as well as with those in the surrounding area. Maryland’s sales tax rate on alcohol is already much higher than our neighbors. Virginia has a 5.3% tax, and Pennsylvania and West Virginia both have a 6% tax. Walking down main streets in Maryland, it is easy to see that our state’s bars and restaurants need assistance — not additional taxes. It will likely take years for our state’s bars and restaurants to get back to where they were before the COVID-19 pandemic. Taxing them now will only make our community recovery more difficult.
Finally, this tax will also disproportionately hurt working Marylanders, since I may ultimately have to pass these costs onto my customers. As a small-business owner, I wholeheartedly love this state, my customers and the community where I have the privilege to operate. Maintaining Maryland’s current tax rate will help me keep my doors open, proving that Maryland is committed to small minority brewers and bolstering small businesses which are undoubtedly the economic heartbeat of our state.
Tranice Watts, Waldorf
The writer is co-owner and business manager for Patuxent Brewing Company.