Move would put increased burden on already struggling hospitality industry, reduce jobs and cost consumers
The New Mexico Senate Judiciary Committee passed HB 255, a measure that would increase the sales tax rate on beverage alcohol by two percentage points, resulting in higher prices and a reduction in jobs.
The bill now moves to the Senate floor where the chamber is set to consider the proposed tax increase despite the negative impacts COVID-19 has had on the hospitality industry.
“Increasing taxes on responsible spirits consumers and hospitality businesses in the middle of a pandemic that has shut down tourism to fund the state’s budget deficit is misguided and will only further devastate local restaurants, hotels and bars,” said Kristi Brown, Distilled Spirits Council of the United States Senior Director of State Government Relations. “Increased taxes will be passed on to consumers in the form of higher prices. Higher prices lead to a loss in sales, and a loss in sales leads businesses to cut even more jobs. This, on top of the negative financial impacts created by COVID-19 and the more than 29,000 jobs lost in New Mexico’s hospitality industry alone, would be too much for many businesses to bear. The legislature should protect consumers and small businesses by rejecting an increase on alcohol taxes.”
According to a tax impact analysis by the chief economist for the Distilled Spirits Council of the United States, New Mexico businesses would see a decline in retail alcohol sales of more than $17 million, resulting in more than 250 jobs lost.
