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Thursday, May 21, 2009

Assemblywoman Russell fighting for repeal of ‘floor tax’ on wine and beer
Businesses say being taxed twice is wrong

Assemblywoman Addie J. Russell (D-Theresa) is fighting a one-time special “floor tax” on wine and beer that charges wholesalers, retailers, restaurant and other store owners an extra 11 cents per gallon of wine and 3 cents per gallon of beer inventory – on top of the new increase in the state’s excise tax.

“The floor tax simply needs to be repealed. It does much more harm as opposed to generating any significant revenue for the State.” Assemblywoman Russell said. “I have begun working with assistance from small businesses here in my district and I am hopeful we can repeal this tax. In these tough times, we must act to help small businesses, not hurt them. After all, these businesses will be the ones helping our state grow out of this current deficit – a challenge only accomplished by providing jobs and boosting revenue.”

Thousand Islands Winery Owner Steve Conaway said small businesses are already feeling the pinch.

“In the last couple of weeks of April, our winery sales plummeted 20 percent because few retail outlets wanted the product on-premises – because they would have to pay the floor tax,” Conaway said. “To make up that loss of volume, not only did I have to pay the 11 cents a gallon on inventory – which amounted to about $2,000 – but I had to reduce the product price to get sales resuscitated.”

In addition, those who have to pay the tax were given little notice, had to perform an April 30th inventory, and no long term payment options. Unlike the excise tax, the floor tax would be paid in one lump sum to the state, and businesses would be forced to come up with hundreds if not thousands of dollars on the spot – a difficult task for small businesses that already operate on tight budgets.

“The wineries, breweries, restaurants, liquor stores, and wholesalers are being forced to pay tax on the inventory already on the floor or in their warehouses and stockrooms, which means being taxed twice,” Russell said.

John Rice, Owner of JR Liquors said; “There is a great unawareness of the floor tax among business owners. What is going to happen when a bar owner doesn’t have even a clue that they were supposed to do an inventory on April 30th and then gets a bill next Fall for the principal, interest and penalty?”

Russell added that small businesses account for 80 percent of new job creation and that the State should be helping these businesses, which will spur additional economic growth for the North Country and other regions.