Here at the Pelican Pub & Brewery we get a lot of questions about the beer tax issue so we put together a list of these questions and their answers in order to help everyone better understand the issue.

What is the proposed beer tax?

The proposed beer tax is a 1900% increase from the current tax and raises the tax on a barrel of beer (31 gallons) from $2.60 to $52.21. The tax does not change for any other alcoholic beverage - only beer. If this passes it will be the largest tax increase in the history of the United States of America.

Who wants to raise the beer tax?

The tax bill (HB 2641) is Sponsored by Representatives Ben Cannon and Michael Dembrow along with Senators Jackie Dingfelder, Bill Morrisette and Diane Rosenbaum.

Why do they want to raise the beer tax?

Those in favor of the beer tax point to the need for more addiction treatment services and are implying that brewers are not paying their share. Bill sponsors call this tax a "fifteen cents per drink" tax but this is simply a lie which we will examine shortly.

Why do we oppose the beer tax?

First, we agree that addiction treatment is important but we don't think that the brewing industry should be the primary source of revenue for funding programs that range from illegal methamphetamines to compulsive gambling. Right now only about $8 million of the $156 million that the Oregon Liquor Control Commission collects goes to fund these programs. Addiction problems are broad social problems that need everyone's help to solve.

Second, the price increase for a pint or 6-pack that would result from such a huge tax increase would cost the consumer hundreds of millions of dollars, causing a drop in beer sales which would have a dramatic negative impact on Oregon's Craft Brewing industry. The Pelican Pub & Brewery is one of the largest employers in south Tillamook county and we strive to provide family wage jobs with good benefits to our employees. With the brewery being such an important part of our business, if the beer tax goes through we would have no choice but to cut hours, benefits and jobs which makes difficult economic times even worse.

How does the beer tax affect you?

The reason the "fifteen cents per drink" does not work out is because it is assessed at the point of production. For a brewery our size the tax would add $75,000 to our costs to produce beer and as we all know when costs go up so does the price at the bar or grocery store. As beer travels through the 3 tier system the cost of a pint or six-pack goes up dramatically. Let's take a look at the example below to see how this works.

Pre-tax increase

Brewery sells a 6-pack to wholesaler for				Wholesaler working on a 30% margin now sells the 6-pack to retailer for			Retailer working on a 35% margin sells 6-pack to consumer for

With new tax HB 2461

Brewery sells a 6-pack with the fifteen cents per bottle increase to the wholesaler for			Wholesaler working on a 30% margin now sells the 6-pack to retailer for			Retailer working on a 35% margin sells 6-pack to consumer for

Suddenly "fifteen cents per drink" becomes a $2 per six pack and $1.50 per pint increase, which has a dramatic effect on your pocketbook.

HB 2461 is a drastic, punitive and exorbitant tax increase targeted at one industry and one group of consumers. It will cripple one of the few industries which is holding its own in this economic downturn. It is unfair, unnecessary, and short-sighted. We urge you to tell our legislators that you do not support this bill.

How do I find out who my legislators are and how to contact them?

Go to www.votesmart.org