On Monday, legislators in Santa Fe, New Mexico, advanced House Bill 213, which aimed to modify the state’s approach to alcohol taxation. The proposed legislation intends to shift the taxation from being imposed on wholesale transactions to being applied at the retail level.
According to the Legislative Finance Committee, this adjustment might lead to an increase in the cost of alcoholic beverages and cocktails when bought in dining establishments while potentially reducing the prices of certain packaged liquors sold in retail outlets. The committee highlighted that alcohol taxes in New Mexico have remained unchanged for over two decades.
The bill also suggests an exemption from excise taxes for small-scale producers such as microbreweries, craft distilleries, and boutique wine producers, maintaining a tax framework that favors these small entities.
During a session of the House Health and Human Services Committee on February 5, discussions were held regarding the allocation of these funds.
A major amendment was made to establish an “alcohol and substance use harms alleviation fund.” This fund is designed to allocate half of its resources to secure federal matching funds aimed at preventing alcohol and substance misuse, with the remaining funds directed toward supporting local counties and the Indian Affairs Department.
According to Errors of Enchantment by the Rio Grande Foundation, the bill would hike prices on beer and cider by 651 percent, wine by 376 percent, spirits by 353 percent, and fortified wine by 161 percent.
“We have previously discussed the fact that New Mexico’s taxes on alcohol are NOT low. In fact, our tax on wine is already 5th-highest in the nation,” wrote the outlet.
Despite the bill’s progression, not all feedback was positive. Representative Joanne J. Ferrary (D-Doña Ana), the bill’s sponsor, expressed concerns to the committee, arguing that the proposed tax rates on beer might be insufficient to curb underage and excessive drinking.