Bill to increase access/lower taxes on spirits ready-to-drink products heads to governor’s desk.

The Vermont Legislature passed HB 730, a bill to reduce the tax rate for spirits-based ready-to-drink (RTD) products and expand outlets where they can be sold. The bill now heads to Governor Phil Scott (R-VT) for signature.

“Not only are Vermont spirits consumers inconvenienced by having to go to a separate store to purchase spirits-based ready-to-drink cocktails, but they also incur higher prices due to the excessive tax burden placed on these products,” said Jay Hibbard, Distilled Spirits Council of the United States Senior Vice President of State Government Relations. “There is no reason products with the same or similar alcohol content should be taxed at such wildly varying rates. Creating a more equal tax rate for spirits-based RTDs will support Vermont’s distillers, lower costs for consumers and bring in revenue for the state. We thank the Legislature for moving this measure forward and encourage Governor Scott to sign the bill.”

The bill expands access to spirits-based RTDs by allowing 1,030 private beer and wine retailers to also sell these products. The bill reduces the tax on spirits-based RTD products from $7.68/gallon to $1.10/gallon. If signed, the provisions would be effective July 1, 2022.

Twenty-four states already have lower tax rates for lower-abv spirits-based products. In fact, last year bills to reduce the state excise tax on spirits-based RTDs were passed in Michigan and Nebraska. At least 12 states have introduced bills so far this year to create a more level playing field for spirits-based RTDs in support of consumers and small businesses in their communities.

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