SB 5368 — Studying taxes and fees related to alcohol.

ENGROSSEDS-0644.1 SUBSTITUTE SENATE BILL 5368 State of Washington 69th Legislature 2025 Regular Session By SenateSenator LaborChapman &AN CommerceACT (originallyRelating sponsoredto bystudying Senatortaxes Chapman)and READfees FIRSTrelated TIMEto 02/18/25.alcohol;

AN ACT Relating to studying taxes and fees related to alcohol;

(1) The Washingtondepartment stateof instituterevenue for public policy must conduct a study regarding Washington state's current system of alcohol taxation and fees and produce a final report as described in this section.

(c) Annual sales in the state of spirits, wine, and beer in total and per capita over the past five25 years;

(d) Annual spirits, wine, and beer tax and fee revenues generated in the state over the past five25 years in total and by tax or fee type;

(e) Annual spirits, wine, and beer tax and fee revenues per capita generated in the state over the past 25 years in total and by tax or fee type;

1 ESSBSB 5368 (e)(f) AnnualTo spirits,the wine,extent practicable, an analysis of total and beerper capita spirits sales and related tax and fee revenues perin capitaother generatedstates, indifferentiated theby statewhether over the pastsale fiveof yearsoff-premises inspirits totalis andcontrolled by taxthe state or feeallowed type;by licensed private entities;

(f)(g) To the extent practicable, allan analysis of thetotal following:and per capita spirits sales and related tax and fee revenues in other states and countries differentiated by whether spirits taxation is based on volume, price, or alcohol content;

(i)and An(h) To the extent practicable, an analysis of total and per capita spiritsspirits, salesbeer, and relatedwine sales and tax and fee revenues in otherthis states,state differentiatedand other states by whethereach theapplicable saleunit of off-premisesmeasurement spiritsof isalcohol controlledcontent byand thevolume, statedifferentiated or allowed by licensedproduct privatecategory. entities;

(ii)(3) AnThe analysisdepartment ofmust totalsubmit anda perfinal capitareport spiritsto salesthe andrelevant relatedcommittees taxof andthe feelegislature revenues in other states and countries differentiated by whetherDecember spirits31, taxation2025. is based on volume, price, or alcohol content;

(iii)(4) AnThe analysisliquor of total and percannabis capitaboard spirits,must beer,cooperate andwith winethe salesdepartment and tax and fee revenues in this state and other states by each applicable unit of measurementrevenue ofto alcoholprovide contentdata andrelevant volume,to differentiatedthis bystudy. product category;

(iv)(5) TheThis informationsection requiredexpires inJanuary (c),1, (d),2026. and (e) of this subsection ranging from 2008 to 2020;

(v) Estimated costs to transition to a tax system in the state where tax rates are determined solely by the alcohol content of products, the estimated annual costs to administer this system, and the estimated tax revenue of this system;

(vi) Estimated tax rates for spirits, beer, and wine that would have to be applied to maintain a revenue neutral tax system in the state if tax rates were based solely on the alcohol content of products;

and (vii) An analysis of the economic impact of the state's breweries, wineries, and distilleries, and potential changes to the economic impact if tax rates were based solely on the alcohol content of products.

For the purposes of this subsection, "economic impact" includes the number and average wage of local jobs.

(3) The Washington state institute for public policy must submit a final report to the relevant committees of the legislature by June 30, 2026.

(4) The liquor and cannabis board and department of revenue must cooperate with the Washington state institute for public policy to provide data relevant to this study.

(5) This section expires July 1, 2026.

2 ESSBSB 5368