Sin City Vices Face Taxing Challenges

Las Vegas entertainment to some is not going out to an expensive dinner or even a movie- it’s simply having a nice slow drag on a cig after a hard day’s work while contemplating life’s woes over a frosty, frothy beer. sintaxes

But you better take your last chugs and drags now, for that all may soon change.   Instead of being considered expenses, these sanity-saving vices may soon become investments. 

If Assemblyman Bernie Anderson, D-Sparks, has his way with bill AB277, it would more than double the taxes placed on alcohol.  The Nevada Assembly Taxation Committee is scheduled to hear proposals that would dramatically raise taxes on alcohol and tobacco. 

Despite Nevada’s out of balance state budget, hospitality industry spokespeople are warning that higher taxes will hurt the already crippled service industry and are fighting the proposal tooth and nail. 

But, for now, these sin taxes are considered the most politically palatable – the low hanging fruit.  

Taxes, if approved, would be raised as follows:

– Hard alcohol, and anything with with higher than 44 proof, or 22 percent alcohol, would go from $3.60 to $7.86 a gallon. 

– Alcohol with proof of between 28 and 44 would go from $1.30 a gallon to $3.43 a gallon. 

– Alcohol with proof of between 0.5 percent and 28 proof – most beer and wine – would go from 70 cents to $1.77 per gallon. 

The bill could raise as much as $100 million a year, according to Anderson. 

The Distilled Spirits Council of the United States sent out a press release warning such a tax increase could seriously affect hospitality jobs. 

“In the depths of one of the worst recessions in history, I can’t think of a less appropriate time for Nevada politicians to punish the hospitality industry – the cornerstone of the economy – with higher alcohol taxes,” said Council Vice President Adam Smith, in the news release. 

Proposed Nevada Assembly bill AB255, sponsored by Assemblywoman Sheila Leslie, D-Reno, would also add another $1 tax to a pack of cigarettes. Currently, the state tax is $0.80. 

How much money the increased tax would raise is unclear because studies have shown that increasing the tax on cigarettes causes sales to go down. One estimate, prepared by Nevada legislative staff, showed it could raise as much as $251 million over two years.

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