HB 2079
In CommitteeHouse
Alcohol taxes
Increasing alcohol taxes.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill raises taxes on wine and beer sold in Washington, with rates varying by product type and volume. It also updates reporting and collection rules, and allocates new revenue to state and local programs. The changes take effect on July 1, 2025.
- Increases wine tax to $0.2025 per liter for most wines (up from prior rates) and $0.0359 per liter for cider.
- Adds a new 14% additional tax on wine (calculated as a percentage of the base wine tax), and sets other tiered taxes for fortified wine, cider, and other wine types.
- Raises beer tax to $1.30 per barrel (plus a new $1.2961 per barrel additional tax), and increases the federal excise tax equivalent to $9.56 per barrel for large brewers.
- Requires monthly tax reports and payments for wine and beer purchases, with a 2% monthly penalty for late payments; allows annual filing for very small wineries (≤6,000 gallons/year).
- Directs new revenue streams to the state general fund, counties, cities, border areas, and the Washington Wine Commission (for wine promotion and research).
Who is affected
- Wine producers and distributors — Wine producers and distributors in Washington, especially those selling more than 6,000 gallons annually, will face higher taxes and more frequent reporting requirements; small wineries (≤6,000 gallons/year) may pay taxes only once per year.
- Beer manufacturers and distributors — Beer manufacturers (especially microbreweries) and distributors will pay higher taxes per barrel, with some relief for small-volume brewers (first 60,000 barrels/year). Retailers must report monthly purchases.
- State and local governments — State and local governments will receive increased revenue, with portions directed to counties, cities, and border areas; the Washington Wine Commission will receive funding for promotion and research.
- Alcohol consumers — Consumers may see higher prices at retail due to increased taxes passed on by distributors and retailers.
Pro/Con Analysis
Potential Benefits (5)
The bill directs new revenue to the Washington Wine Commission for promotion and research, and allocates portions of beer tax revenue to counties, cities, and border areas—supporting local economic development, tourism, and small-business ecosystems in rural and border communities.
Business & EmploymentPeopleRef: Sec. 1(3), Sec. 1(5), Sec. 2(5)The bill increases funding for counties and cities through beer tax distributions (20% to counties, 80% to cities), which can support essential local services like roads, parks, and public health—though this benefit is offset by the regressive tax burden on consumers.
Local GovernmentPeopleRef: Sec. 2(5), Sec. 2(6)The bill allows small wineries producing ≤6,000 gallons/year to file annually instead of monthly, reducing administrative burden for very small producers—though the tax rate itself still increases, limiting net benefit.
Business & EmploymentPeopleRef: Sec. 1(7), Sec. 2(1)The bill allocates a portion of wine and beer tax revenue to border areas (e.g., 3% of beer revenue under Sec. 2(5)(a)), supporting infrastructure and services in communities adjacent to other states—helping offset economic disparities in those regions.
Business & EmploymentLean peopleRef: Sec. 1(3), Sec. 1(5), Sec. 2(5)The bill modernizes reporting requirements (e.g., monthly filings, penalties for late payments), which could improve tax compliance and reduce evasion—though this primarily benefits state revenue collection rather than directly helping consumers or small businesses.
Business & EmploymentLean peopleRef: Sec. 1(1), Sec. 2(1)
Potential Concerns (5)
The bill imposes a 14% additional tax on wine (calculated as a percentage of the base wine tax) and increases beer taxes by $1.2961 per barrel, which will likely be passed through to consumers in the form of higher retail prices—especially for mid- and high-end wines and craft beers. This regressive effect disproportionately impacts lower- and middle-income households, who spend a larger share of income on alcohol.
FinancialLean industryRef: Sec. 1(2), Sec. 1(4), Sec. 2(2), Sec. 2(3), Sec. 2(6)While the bill includes a small-volume exemption for the first 60,000 barrels of beer for federally qualified microbreweries, the new $1.2961/barrel tax (Sec. 2(6)) and the 14% wine additional tax (Sec. 1(2)) apply broadly and disproportionately benefit large brewers and wineries that can absorb or pass on costs more easily—especially since the exemption only applies to the first 60,000 barrels, and many microbreweries exceed that threshold.
Business & EmploymentIndustryRef: Sec. 2(3)(b), Sec. 2(6)The bill increases reporting and compliance burdens for wine and beer purchasers—including retailers and distributors—requiring monthly filings with a 2% monthly penalty for late payments, which may strain small businesses and local governments that lack dedicated tax compliance staff.
Local GovernmentLean industryRef: Sec. 1(1), Sec. 1(7), Sec. 2(1), Sec. 2(4)The bill eliminates the previous tiered structure for beer taxes (e.g., reduced rates for first 60,000 barrels under older law) and replaces it with a flat $1.30 base tax plus $1.2961 additional tax, effectively increasing the tax burden on small and mid-sized breweries that previously qualified for reduced rates under federal law.
Business & EmploymentLean industryRef: Sec. 1(1), Sec. 2(1)The bill does not allocate any portion of new revenue to public safety, health, or substance abuse prevention programs—unlike prior alcohol tax structures that funded treatment and enforcement—potentially weakening local capacity to address alcohol-related harms, especially in border communities.
Public SafetyPeopleRef: Fiscal Impact Summary
Who Is Most Affected
Large wine producers and distributors benefit from the structure: the 14% additional tax and tiered rates are easier to absorb at scale, and the $0.2025/liter wine tax applies uniformly—smaller wineries face disproportionate compliance costs relative to revenue. The bill's structure favors volume-based producers over small-batch artisans.
Microbreweries producing over 60,000 barrels/year face higher effective tax rates due to loss of the federal microbrewer exemption and new flat tax layers. Those under 60,000 barrels still face the $1.2961/barrel additional tax (Sec. 2(6)), reducing the net benefit of the exemption.
Low- and middle-income consumers bear the brunt of price increases, as alcohol taxes are regressive. A $1.30 + $1.2961/barrel beer tax (~$0.042/barrel increase) translates to ~$0.04–$0.08 more per 6-pack—adding up across categories and households.
Counties and cities gain new revenue streams (20% of beer tax to counties, 80% to cities), which can support local services—but this is partially offset by increased enforcement and compliance costs for local liquor licensing offices.
The Washington Wine Commission gains dedicated funding for promotion and research, which benefits the state’s wine industry broadly—but most direct economic benefits accrue to larger producers with marketing and export capacity.