Alcohol & Tobacco
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Alcohol & Tobacco Tax Annual Report Fiscal Year 2009 Comptroller of Maryland Comptroller of Maryland Alcohol & Tobacco Tax Peter Franchot, Comptroller of Maryland Louis L. Goldstein Treasury Building P.O. Box 2999 Annapolis, MD 21404-2999 Tel: 410.260.7314 To the General Assembly and the Governor of Maryland: I am pleased to present the fiscal year 2009 report of the Alcohol and Tobacco Tax Bureau of the State Comptroller’s Office, transmitted in compliance with provisions of Section 14-203 of Article 2B of the Annotated Code of Maryland and prepared by the Alcohol and Tobacco Tax office. This report reviews the office’s activities and details revenue collections and comparisons, license information, consumption figures and other statistics. If you need more information on any items covered in this report, please contact the Alcohol and Tobacco Tax office or me, in Annapolis, and we will be happy to help you. Sincerely, Comptroller of Maryland Table of Contents I. Preface Introduction............................................................. 1 II. Revenues State Gross Revenue from 1933-2008 .................. 2 Net Revenue .......................................................... 3 Revenue Comparison by Months ........................... 4 Distilled Spirits, Wine, Beer Revenue Comparison by Months............................ 5 Tobacco State Gross Revenue from Licenses ..................... 6 State Gross Revenue from Permits........................ 7 III. Consumption Trends Consumption of Distilled Spirits, Beer & Wine ........ 8 Per Capita Tax Dollars & Consumption.................. 9 Distilled Spirits, Wine, Beer Wholesale Alcoholic Beverage Deliveries & Cigarette Sales for Fiscal Year 2008................... 10 Comparative Analysis ............................................. 11 Maryland Wineries.................................................. 12 Maryland Breweries................................................ 13 IV. Administrative & Enforcement Summary of Administrative Activities...................... 14 V. Appendix Bulk Transfer Permits ............................................. 15 Alcoholic Beverages Area & Population Chart........ 16 State of Maryland Map............................................ 17 Revenues Received by Local Authorities................ 18 Retail Licenses by Class......................................... 19 Retail Licenses as of April 30, 2008........................ 20 Retail License Violations......................................... 21 Retail License Information ...................................... 22-29 Retail License Issuing Authorities........................... 30-31 Liquor Control Boards & Dispensary Locations ...... 32 Clerks of the Court Statewide ................................. 33 INTRODUCTION The Revenue Administration Division of the from an amount not exceeding 10% to an amount not exceeding 25%, Comptroller of Maryland is responsible for collecting the same as the penalty for unpaid tobacco tax. The purpose of the alcoholic beverage and tobacco taxes, and administering the increase in penalty amount is to align the alcoholic beverage tax with State’s alcoholic beverage and tobacco tax laws. The Motor- the tobacco tax, and to secure voluntary compliance. Effective October fuel, Alcohol, and Tobacco Tax (“MATT”) Regulatory Bureau, 1, 2009 Field Enforcement Division of the Comptroller is responsible for regulation and enforcement of the State’s alcoholic Senate Bill 162 (Chapter 205) beverage and tobacco tax laws. Alcoholic Beverages – Resident Dealer’s Permit This bill establishes a new Resident Dealer Permit for alcoholic This report details the Revenue Administration beverages. A Resident Dealer Permit will be issued for an annual fee of Division’s activities, including revenue collections and audit $200 to those persons who do not own a warehouse and sell directly activities for fiscal year 2009: July 1, 2008 through June 30, through a licensed Maryland wholesaler. This permit is the counterpart 2009. to the nonresident dealer permit, except for the residency requirement of 2 years prior to filing an application. A Maryland-based importer who acts like a nonresident dealer with respect to Maryland wholesalers may Revenue pay the same annual licensure fee as nonresident dealers rather than the more costly wholesaler license fee. Total net receipts derived from the alcoholic Effective July 1, 2009 beverage and tobacco taxes, license and permit fees, and miscellaneous income for fiscal year 2009 amounted to House Bill 653 (Chapter 688) $435,896,648. A 3.36% decrease in the beer tax revenue, a Fire Safety Performance Standard for Cigarettes – Sale or 2.75% increase in wine tax collections and a 2.61% increase Distribution for Consumer Testing Under Controlled Settings in the distilled spirits receipts contributed to an overall This bill defines “sell” and “consumer testing” for determining increase of .70% in alcoholic beverage tax collections applicability of the Fire Safety Performance Standard law. The definition compared with fiscal year 2008. The net receipts from the of “sell” includes sample cigarettes, and cigarettes used for consumer sale of cigarette tax stamps, $394,308,110, reflected a testing. By changing the definition of “sell” to include cigarettes used for 15.7% decrease from the previous fiscal year. The net consumer testing, a manufacturer certification can be required for those receipts from Other Tobacco Products Tax amounted to cigarettes used in a non-controlled setting, such as random sampling of $10,796,842, an increase of 12.72% from the previous fiscal cigarettes sent to the public. This type of certification may be filed year. Other Tobacco Products include chewing tobacco, “confidential under seal” with respect to the cigarettes descriptors of snuff, pipe tobacco, cigars and roll-your-own. brand, style, length, circumference, flavor, and package in order to protect proprietary information. Effective October 1, 2009 Tobacco taxes provided the largest percentage of net receipts at 93.05%, with distilled spirits -- 3.37.%, beer – 2.09%, wine – 1.23% and net other collections – 0.26%. Senate Bill 1059 (Chapter 347) Cigarette Business Licenses – Cigarette Manufacturers – Alcohol and Tobacco Legislation Definitions and Scope of License This bill changes the definition of a manufacturer to include The Maryland General Assembly passed 5 cigarette makers that have plants located outside of the United States, legislative bills during the 2009 session related to the and those that sell cigarettes only to Maryland licensed wholesalers alcohol and tobacco tax laws. Those bills are listed with the located outside of State boundaries. It allows all manufacturers to obtain corresponding chapter number indicated in parenthesis. The a license to sell cigarettes in Maryland, and incorporates into the General Assembly also passed approximately 34 alcohol definition of manufacturer those “participating manufacturers” who are bills affecting laws at the county level. For a summary of the parties to the Master Settlement Agreement and defined as legislation, visit the Maryland General Assembly’s website, manufacturers under the MSA because of their status as the exclusive http://mlis.state.md.us. U.S. importer for foreign cigarette manufacturers. Effective October 1, 2009 2009 Regular Session Senate Bill 12 (Chapter 12) Chapter 12 – Senate Bill 12 - Tobacco Product Manufacturers – Senate Bill 64 (Chapter 353) Settlement of State Claims – Nonparticipating Manufacturers – .Alcoholic Beverage Tax – Assessment and Appeals – Deposit of Funds in Escrow – Codification of Model Statute Tax Procedures and Penalties This bill codifies the Tobacco Product Manufacturers Escrow This bill adds alcoholic beverage tax to the Act passed by the Maryland General Assembly in 1999. It makes no provisions which allow a taxpayer to make an application for substantive change to Maryland law. The Escrow Act requires cigarette revision of a tax assessment and for the Comptroller to hold manufacturers that have not signed the Master Settlement Agreement an informal hearing concerning such an appeal. The bill also (MSA) to deposit certain monies in an escrow account to ensure that gives the Comptroller authority to decrease or abate an funds would be available if the State of Maryland were to sue them in erroneous assessment for alcoholic beverage tax. Currently, the future. By requiring these payments, the Escrow Act levels the the authority of the Comptroller to conduct hearings related playing field between tobacco manufacturers that have signed the MSA to the alcoholic beverage tax is in Article 2B. This authority and those that have not, and thereby promotes the public health should be in the Tax-General Article, Title 13 where all the provisions of the MSA. Effective October 1, 2009 other taxes collected by the Comptroller are found. Also, this bill increases the penalty for unpaid alcoholic beverage tax State of Maryland - Alcohol and Tobacco Tax Annual Report - 2009 Page 1 STATE GROSS REVENUE FROM 1933 - 2009 a) Alcoholic Beverage License Fees 10,422,186,07 a b) Distilled Spirits 748,742,412.78 b c) Manufacturer’s Tax on Distilled Spirits 1,528,684.14 c d) Wine 160,989,230.77 d e) Beer 408,065,446.73 e f) Alcoholic Beverage Permit Fees 12,675,058.25 f g) Cigarettes 4,823,275,602.03 g h) Other Tobacco Products 72,545,939.23 h Miscellaneous Alcoholic Beverages 1,331,950.50 Miscellaneous Tobacco 65,005,407.42 Total $6,304,581,917.92 (a) License fees are collected from manufacturers,