Posted on Wed, Mar. 26, 2003


Senate panel finds tax would offset loss of minibottles


The Sun News

The numbers added up Tuesday for a Senate panel assigned to review how a 5 percent cocktail tax will make up for lost minibottle taxes.

"I certainly think it's going to be a benefit to the citizens to go to this," said Sen. Thomas Alexander, R-Walhalla, who moved to send the bills on to the full Senate.

The bills set a referendum for voters to approve ending the requirement to use minibottles and specify how to do it.

They could be debated in the Senate next week.

"It's a great day," said Tom Sponseller, president of the S.C. Hospitality Association. For years, ending the state's status as the only one requiring minibottles has been a top priority of the industry.

The Senate Judiciary Committee approved the bills almost two weeks ago, but Finance Committee Chairman Hugh Leatherman, R-Florence, said he wanted to review the figures.

He assigned that task to a three-member subcommittee.

State Economist Bill Gillespie said current revenue based on the sale of 72.5 million minibottles is $21.5 million. The sale of 79.8 million cocktails at $4.50 apiece would generate $21.7 million.

"I feel confident we're not going to lose any money off this," Gillespie said.

Staff members visited larger cities and tourism areas to interview barkeepers and gather drink prices.

"We hit the beach pretty good," Gillespie said.

He used the information to arrive at an average cocktail price of $4.50 and to calculate sales expectations if bars changed to free-pouring.

No one interviewed wanted to keep minibottles if the law is changed, and everyone expected to sell a few more drinks, he said.

Sen. Wes Hayes, R-Rock Hill and author of the bill that specifies how the change would be put into effect, said he thinks Gillespie's figures are conservative and the state's revenue will be protected.

Complaints have been voiced about cheating and the state not getting all its payments, but Hayes said bars are already collecting sales tax on cocktails, so all they need to do is add the drink tax.

To become law, voters would have to approve the measures in the 2004 election. They would allow bars to continue to use minibottles if they wish and would go into effect in July 2005.


Contact ZANE WILSON at zwilson@thesunnews.com or 520-0397.




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