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05/08/2021 09:04 AM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20210&cosponId=32986
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Senate of Pennsylvania
Session of 2021 - 2022 Regular Session

MEMORANDUM

Posted: December 3, 2020 11:50 AM
From: Senator Mario M. Scavello
To: All Senate members
Subject: Sales Tax Parity Retail Sales of Malt or Brewed Beverages
 
In the near future I intend to introduce legislation which will amend the tax reform code to correct disparity in taxation of retail sales of malt or brewed beverages. This legislation will require all takeout sellers of beer to collect the sales tax at the point of sale, and to give retailers (R, H or E) a credit for the taxes already paid on the purchase from either a distributor (D) or an importing distributor (ID).

Currently, those with a distributor license (D) compete among themselves and with retail sellers who operate with a restaurant license (R).  This includes grocery, convenience and any big box store that establishes an “eating establishment”, a term in which for enforcement purposes, is loosely defined today by the Pennsylvania Liquor Control Board (PLCB) and Liquor Control Enforcement (LCE).

In the entire state, those with an R license, as well as an H or E, whether buying from a D or ID, pay sales taxes on their purchase based on the wholesale value.  They are then exempted from collecting the tax from the retail customer, who is exempted from paying it.

On beer sold through an R, H, or E, the state only collects sales tax on the wholesale value; however with sales through a D license the tax is paid by the customer on the retail value. Therefore, R-based takeout customers—operate under the perception that “grocery stores do not collect sales taxes and distributors do collect sales taxes.”

This creates disparity and puts D and ID license holders at a competitive disadvantage.  This legislation would correct this disparity by requiring all takeout sellers of beer located outside of Allegheny and Philadelphia to collect the sales tax at the point of sale at 6% of the retail price, and to give these retailers a credit for the taxes they paid on the purchase from either a distributor or an importing distributor.  These merchants already collect sales tax in the same fashion on food and non-alcoholic beverages served at these premises.

Please join me in co-sponsoring this important legislation.  If you have any questions regarding this legislation, please contact Christine Zubeck in my office at 717-787-6123 or czubeck@pasen.gov.  Thank you for your consideration.