Tax & Accounting Blog

Oregonians to vote on sales tax…of a sort

Blog, Indirect Tax, ONESOURCE, Sales and Use Tax March 27, 2014

Nebraska-300x189Two ballot measures that may appear on the November 2014 ballot in Oregon would allow Oregonians the chance to weigh in on the privatization of liquor sales. The ballot measures, Initiative #47 and Initiative #58 are not necessarily unique because they would replace the current Oregon Liquor Control Commission’s regulation of liquor sales, but instead because they would include a sales tax provision.  Currently, liquor sales in Oregon are made exclusively by state regulated retail sale agents.  Attorney General Letter on Initiative #58 (March 19, 2014). OLCC prices are fixed at 1.798 times the cost per case. Id. Both of the proposed initiatives would replace that fixed price with a minimum price floor and 71.7% sales tax on the retail sale of distilled liquors.  See Section 16 of proposed laws.

Oregon is currently one of five states that do not impose a general state sales tax; the other four are: Alaska, Delaware, Montana, and New Hampshire (commonly referred to as the “NOMAD” states).   The Distilled Liquor Sales tax would not be the only sales tax in the state, however. Many localities in Oregon already impose transactions taxes based on retail transactions including automobile rental taxes, transient occupancy taxes, and prepared food and beverage taxes in Ashland and Yachats. The citizens of the State of Washington recently adopted Initiative 1183 in 2013, authorizing the privitization of liquor sales in that state.