Michigan legislature considers alcohol tax cut

LANSING, MI -- While legislatures in a number of states are looking for increased alcohol taxes to plug budget gaps, a bill is making its way through the Michigan legislative process to do just the opposite.

The bill would eliminate a 1.85% tax on sales of distilled spirits at off-site premises -- grocery stores and liquor stores -- and would result in a $14 million annual reduction in state revenue.

The state Senate passed the legislation without dissent on June 1. It now is being considered by the House. The bill would preserve a 12% tax surcharge already imposed on liquor sales.

A spokesman for Speaker of the House Jase Bolger said Bolger supports the bill "in concept," although "there are still questions about the budget impact."

Supporters describe the bill as a way to boost Michigan retailers and eliminate an extra tax on liquor sales that does not apply to sales at restaurants.

The bill does not specify how the lost revenue would be made up. The Legislature in May approved a balanced state budget for 2011-12.

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