Alcohol sales up — for now|Tax increases could reverse current upturn

Published 7:03 pm Sunday, September 20, 2009

By By BETTY MITCHELL GRAY
Staff Writer

Beaufort County, along with the state and the nation, may be in the grips of the most significant economic downturn since the Great Depression, but one economic bright spot exists — sales of alcohol.
Despite, or perhaps because of, an unemployment rate that has topped 11 percent, a rise in the number of home foreclosures, business bankruptcies and government cutbacks, alcohol sales in Beaufort County have increased this year over last year, so far, according to figures from the Beaufort County Alcohol Beverage Control Board.
Mixed-beverage sales for June 2009 were $30,121, compared to June 2008 sales of $25,016 — an increase of more than 20 percent. Total sales of spirits in Beaufort County for June 2009 were $341,036, compared to June 2008 sales of $313,054 — an increase of almost 9 percent, according to a report presented to the Beaufort County Board of Commissioners earlier this month.
For fiscal year 2008-2009, mixed beverage sales were $304,873 compared to the previous fiscal-year sales of $292,584 — an increase of about 4 percent. Meanwhile, statewide mixed-beverage sales are down, according to the report.
For the 2008-2009 fiscal year, total sales of spirits in Beaufort County were $4,142,063 compared to the previous fiscal-year sales of $3,945,075 — an increase of about 5 percent, according to the report.
“When the economy is down, you normally see our sales up,” said JoKay Smith, general manager for the Beaufort County Alcohol Beverage Control Board.
But Beaufort County consumers of alcohol are now feeling another pinch in their wallets that could offset their growing thirst, Smith said.
The state’s sales tax has gone up a full penny while at the same time, cigarettes, beer, wine and liquor have higher excise taxes, all of which will be passed on to buyers.
Lawmakers and Gov. Beverly Perdue agreed to raise these taxes in early August as part of a $991 million package designed to narrow a portion of a budget gap — projected by Democratic leaders at more than $4 billion — for this fiscal year. The rest of the gap was closed with federal stimulus dollars and spending cuts.
The higher sales tax is considered “temporary.” The extra penny tax charged on every $1 in purchases expires July 1, 2011. The excise taxes, however, are permanent.
Smith said the tax increases may cause buyers of alcoholic beverages to downsize their purchases, resulting in lower overall sales.
“When taxes go up, that tends to reduce overall sales,” she said.