ANNAPOLIS, Md. (AP) — Maryland raised roughly $6 million in added revenue in July from a 50 percent increase in the state’s sales tax on alcohol, a state official said Monday.

If the revenue raised in July turns out to be the monthly average, it would add up to about $72 million in extra state revenue a year. Initial estimates projected the tax would raise roughly $85 million a year.

But David Roose, director of the Maryland Bureau of Revenue Estimates, said it’s too hard to tell from the first month of a new tax how much will be raised on an annual basis.

“It’s the first month of a new tax so all sorts of things could have happened, and we are trying not to draw too many conclusions from that number,” Roose said. “People may have stocked up in June knowing that the tax was coming.”

It’s also unclear whether some retailers may not have remitted the full amount of the tax in the first month of implementation, Roose said, and seasonal factors can play a role on alcohol sales.

Roose said it’s going to take a few more months of collections before the state knows what the yearly increase in revenue will be.

“We’re certainly ending up with more revenue than we otherwise would have had,” Roose said.

Lawmakers approved the hike in the state’s sales tax on alcohol from 6 percent to 9 percent in the last legislative session.

Maryland schools will get about $68 million in a one-time boost during the first year. About $15 million will help some 500 developmentally disabled residents get off a 5,000-person waiting list to receive community services.

It’s unclear exactly how future proceeds from the tax increase will be used as the state continues to grapple with budget deficits.

A coalition of health care advocates who pushed for the increase says the tax will not only increase badly needed revenue for the state during tough times, but also reduce alcohol consumption and have a positive impact on health.

David Jernigan, an associate professor at the Johns Hopkins School of Public Health who worked with supporters to show lawmakers the positive impact of a sales tax increase, said the short-term effects of the change should wear off in the first three months. He also noted that December is a big month for alcohol sales, because of the holidays and New Year’s.

“And, of course, if the tax brings in a bit less money than anticipated, that is likely because people are drinking even less than we anticipated as a result of the tax increase, which in turn will mean that the public health gains from that reduced consumption will be greater,” Jernigan said in an email.

But Sarah Longwell, managing director of The American Beverage Institute, said the higher price for alcoholic drinks will drive down consumption and hurt businesses. She also described the tax as a regressive one that hits lower-income people the hardest.

“Every time there is an increase in the tax you see a reduction in consumption, and it absolutely has a negative impact on the hospitality industry,” said Longwell, whose organization represents more than 130 Maryland restaurants.

Before the July increase, Maryland had last raised beer and wine taxes in 1972. Taxes on distilled spirits had not been raised since 1955. Critics of the legislation have said it’s a terrible time to raise taxes while the state continues to work its way out of the recession, but supporters have contended the increase was long overdue.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

Comments (10)
  1. DOCSRUS says:

    The tax should be increased ten fold. Alcoholics are a huge drain on our public welfare system.

    They are responsible for the need to have a police force thats 40-60% larger than would otherwise be required if hard drugs like alcohol were prohibited.

    They cause 35,000 drunk driving deaths annually. The damage tax payer owned property during there nightly follies to the crack houses or excuse me “lounges”.

    The damage done to society by alcoholics is substantial and yet we spend a huge part of our dwindling tax dollars hunting Cannabis farmers and locking up teens that should be going to school.

  2. Goober says:

    Meanwhile our nations largest cash crop worth more than both corn and wheat combined goes UNTAXED…..The alcoholics should be infuriated! Funny stuff!

  3. DOCSRUS says:

    Does this mean that more alcoholics will require public assistance to maintain there habits?

  4. DOCSRUS says:

    According to the US department of Health and Human Services very detailed and in-depth report:

    4,348 children will try Alcohol for the first time today. Thousands of these children will die every year due to alcohol overdose.

    3,577 children will try Cannabis for the first time today. None of these children will die of cannabis overdose according to the CDC and other official record keepers. In fact not one soul has ever died of overdose due to marijuana consumption.

    And according to the UN, WHO & CDC’s statistics, 40-60% of all violence is related to alcohol use. Violence statistics related to marijuana use are virtually nonexistent.

    Yet our government protects the alcoholic industry and spends $135,000,000 (million) per day on the prohibition of cannabis. Not one dime of that is spent to prohibit alcohol, the true root of many of our social problems

    End the prohibition and end the massive waste of a HUGE PORTION of our taxpayer dollars that accomplish absolutely nothing other than making cartels rich and Big Pharmas stockholders richer.

  5. Jim says:

    No, it means you need to stop smoking weed, DOCSRUS

  6. Clem says:

    No, what it means is people are spending their money in Delaware where there 0 sales tax

    1. Susie Que says:

      You must be buying it by the truckload in order to justify gas, tolls, depreciation of your vehicle, and your time! I dont know what the tax rate is but 6%? of $1000- is only $60.00. $1000- worth of booze would be a 10 lifetime supply for my family!

  7. DOCSRUS says:

    I havent smoked it in a long time and I dont drink hard drugs either.

    Its just stupid to spend so much of our budget trying to ban and harmless herb thats been shown to have substantial medical benefits while at the same time allowing hard drugs like alcohol and crack to go unchecked.

    Furthermore the domestic Cannabis maket is worth about 140 million dollars per day with most of that going to criminal cartels in the south. Our country would benefit greatly if 139 million dollars per day was pumped into the local economy instead of shipped across the border a truckload at a time.

  8. Shameful Lies says:

    Lets talk about Numbers Games. We are all aware of the “Used Car Salesman” practice of offering “Top Value” for your trade-in. Problem is; if you bother to look closely before you sign on the line, you will notice that all of the hidden fees and costs (that are clearly explained in the “small print”) roughly equal the Trade-In allowance. Bottom Line: Don’t sign it. Similarly, when a politicians says: “We are going to allocate 68 million of these tax dollars to school funding.” You have to look at the small print too. If so, I think you will find that the small print says something of this nature; “We are going to reduce the state education spending budget by 68 million dollars in 2012, however, we will subsequently “offset” this reduction with other revenue sources. If you didn’t catch the full value of that, let me explain it further. None of the alcohol tax will be used for schools, disabled persons, or any other thing that they promise. The fact is this: you and I don’t have the ability to track the actual dollars collected, or where they go. Uncle Sam knows that all too well. Its just a feel-good banner intended to make us smile.

  9. lark says:

    i work at a liquor store… and actuallyyyy the biggest sales day is thanksgiving… not xmas/new years….. and as for the statement some stores may not have added the extra tax in the first month, thennnn they will have to pay it out of their on pockets at the end of the year, thats the stupidest thing i ever heard.. trust me everyone changed their tax on the night before or the morning of july 1st

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