The beginning of a new year marks a time when most of us are trying to drop bad habits. But if 2015 is a guide, both citizens and lawmakers will likely struggle to accommodate new ones. Last year, numerous jurisdictions amended their alcoholic beverage regulations to account for the non-liquid form of spirits. Other states imposed taxes on e-cigarettes. The controversy over new bad habits and state efforts to either ban or tax them will continue to play out in 2016.
Powdered alcohol is a constant bête noire for many legislators, and Sen. Chuck Schumer (D-NY) once called it the “Kool-Aid of teenage binge drinking.” The substance got banned in over 20 state legislatures last year, and is still up for scrutiny in others.
There are two current bills in California that would ban it in that state.
Assemblymember Jacqui Irwin (D) Introduced A.B. 1554 on Jan. 4. The legislation bans possession, use, manufacturing and sales of powdered alcohol.
On Jan. 5, Sen. Bob Huff (R) introduced S.B. 819, which similarly prohibits the substance and excludes powdered alcohol from the statutory definitions for “alcoholic beverage” and “distilled spirits.”
This is a bipartisan, bicameral effort, as the two legislators co-authored each other’s bills.
Of note is that California regulations provide taxation procedures for powdered alcohol. Cal. Code Regs. tit. 18, § 2557 applies normal alcoholic beverage taxes to powdered alcohol, converting weights into liquid measurements. For example, one pound of the substance is the same as 0.16 wine gallons. This regulation has been around for a while, too; it was adopted in 1978.
In Missouri, Rep. Patricia Pike’s (R) H.B. 1786 has already been read twice and referred to the Emerging Issues Committee. It passed, it would make selling, possessing or shipping powdered alcohol into the state a class C misdemeanor.
Last year, Colorado bucked the trend by legalizing and approving excise taxes on the product after the brand Palcohol got the Alcohol and Tobacco Tax and Trade Bureau’s (TTB) approval.
Things are heating up for e-cigarettes as well. Last year saw two more states (Kansas and Louisiana) and the District of Columbia approve excise taxes on the products. Chicago also joined this list of jurisdictions, and its tax went into effect on Jan. 1.
The tax is imposed on the retail sale of the products -- $0.80 per unit, with an extra $0.55 imposed on each fluid milliliter of consumable solution.
While there are no federal taxes on e-cigarettes, Congress has passed a bill regulating the product for the first time.
On Jan. 11, Congress approved the Child Nicotine Poisoning Prevention Act of 2015 (S. 142), which requires child-resistant packaging for liquid nicotine. The bill will be sent to President Obama to sign.
Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Should powdered alcohol be prohibited or taxed?
With a free trial to Premier State Tax Library, practitioners have a single trusted resource that provides all of the tools and information they need to develop and implement the right tax strategies.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)