Posted on Thu, Dec. 23, 2004
S.C. GENERAL ASSEMBLY

Free-pour legislation filed
Bill addresses tax but not distribution

The Sun News

Free-pour-enabling legislation that will set up the alternative to South Carolina's liquor laws requiring minibottles has gained priority consideration by lawmakers.

The bill was filed early and assigned to a committee. Last session, attempts to set up rules for free pour failed.

The enabling legislation outlines the replacement system for bars and restaurants that choose to use free pour. It is almost the same as one that passed the House and came close to passing the Senate last year. While it deals with a new taxing system, it does not address distribution, which still could cause controversy.

"This year we've got the advantage of that bill having gone through debate," said Sen. Wes Hayes, R-Rock Hill.

He is co-sponsor of the bill with Sen. Dick Elliott, D-North Myrtle Beach.

The bill carries through with voters' wishes, after 59 percent in November chose to have an option to the minibottle system, now used only in South Carolina.

The main point of the enabling legislation is that it replaces the 25-cent wholesale tax on minibottles with a 5 percent cocktail tax collected at the point of sale, along with regular sales tax and any additional local sales or hospitality taxes.

The cocktail tax is the amount estimated by state economists that would be needed to replace the $25 million collected on minibottles.

Last session, the free-pour bill passed the House 92-10 and passed the Senate Judiciary Committee unanimously, then stalled in the full Senate in the face of a filibuster.

The new bill does not include the provision the Senate approved in the spring at the urging of Sen. Phil Leventis, D-Sumter, to end his filibuster.

That provision limited bars to the use of liter bottles, with a special tax being applied to them. The liter bottles could not be sold to anyone else.

Liquor store owners complained the liter is one of their most popular sizes and they did not like the proposal to take them off the market.

Hayes said most legislators will not go along with the liter-bottle requirement because it limits revenue for the state in the same way the minibottle tax does.

A cocktail tax collection can rise with inflation, he said.

"We've been working with all the parties to come up with a product that will stand the best chance of passage," Hayes said.

The bill does not address distribution, and Hayes said he thinks a key element is allowing the liquor stores to deliver. Currently, bar owners have to travel to one of the 58 stores licensed to sell minibottles to pick up their supplies.

That is a hardship on some bar owners, such as those in Georgetown County, where there is no licensed dealer, so they have to travel to Horry County or Charleston.

Picking up supplies would not be as easy to do with big bottles, and most other states allow liquor stores to deliver to bars, Hayes said.

Delivery is something Chet Herman, owner of the bar and restaurant Mayor's House at Litchfield, would like to see.

That's the way it was done in New York, he said.

But Herman also said he is anxious to switch to free pour, although some of the smaller independents have said they will stick with minibottles.

Tom Sponseller, president of the S.C. Hospitality Association, said he is glad to see enabling legislation get started.

"It's great that a bill's been introduced, and it'll get them working early," he said.

Distribution could be a controversial issue, Sponseller said. The original bill allowed owners to buy from any liquor store, but that clashes with federal law.

The association does not have a position on distribution, he said.

"We would like to make sure that whatever the system is that it is the most competitive," he said.


Minibottle-enabling legislation highlights

11 percent of revenue to go to counties for alcohol rehabilitation and education programs


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




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