BARREL TAX Present law requires every person, firm, corporation, joint-stock company, syndicate or association in this state storing, selling, distributing, or manufacturing beer to pay a special privilege tax in an amount equal to $4.29 per barrel of 31 gallons stored, sold, distributed by gift or sale or manufactured in this state. However, the rate must be reduced by 50¢ on July 1 of any year following the enactment of any state or federal law that imposes mandatory deposits by consumers on beverage containers sold in this state or on July 1, 2028, whichever occurs first. This bill reduces the special privilege tax ("barrel tax") from $4.29 to $2 per barrel. This bill also deletes the provision that the rate must be reduced by 50¢ if certain conditions are met or on July 1, 2028. Allocation Present law requires the revenue generated from the increase in tax rates from $3.40 to $3.90 to be allocated to the highway fund for preventing and collecting litter and trash. No later than March 31 of each year, the department of transportation must transmit to the governor, and the speakers of the house of representatives and senate a report listing the programs receiving funds, the amount of funds received by each program, and the purpose for which the funds were spent. These provisions regarding litter collection must be repealed on July 1 of any year following the enactment of any state or federal law that imposes mandatory deposits by consumers on beverage containers sold in this state or on July 1, 2028, whichever occurs first. This bill reduces the special privilege tax to $2 per barrel, as described above. One of the dollars must be allocated to the highway fund for preventing and collecting litter and trash. The other dollar must be allocated to recycling grants issued by the department of environment and conservation for the purpose of funding material recycling programs. This bill, instead, requires the department of transportation and the department of environment and conservation to send the report. Present law provides that the barrel tax described above is a state tax, and a county, municipality or taxing district does not have power to levy any like tax. This bill repeals these provisions on July 1 of any year following the enactment of any state or federal law that imposes mandatory deposits by consumers, taxes, or fees on beverage containers sold in this state or on July 1, 2028, whichever occurs first. Collection Present law requires the commissioner of revenue ("commissioner") to supervise and collect the barrel tax. The commissioner must expend so much of 4% of the amount received under the tax each year as may be necessary to defray the expenses arising out of the administration of the tax. This bill adds that the commissioner must spend this amount to defray costs before July 1, 2025. Distribution Present law requires the barrel tax to be paid into the state treasury and certain percentages of the proceeds be distributed in the following way:  10.05% must be paid to the counties equally to be used by them for general purposes.  10.05% must be divided between the existing incorporated municipalities according to population to be used by them for general purposes.  0.41% must be reserved and transferred to the department of mental health and substance abuse services to assist municipalities and counties in carrying out the Comprehensive Alcohol and Drug Treatment Act of 1973.  The remainder of the tax collected must become a part of the general fund of the state. This bill ends the above distribution requirements by changing that the above distribution of the barrel tax must be paid prior to July 1, 2025. Exemptions Present law prohibits the state tax on beer and ale from being applicable to beer and ale sold for consumption within the geographical boundaries of a fort, base, camp or post of the armed forces of the United States, post exchanges, ship service stores, commissaries and messes operated by the United States armed forces. BOTTLED SOFT DRINK TAX Present law requires a person manufacturing or producing and selling within this state any bottled soft drinks, and a person importing or causing to be drinks into this state from outside the state and selling such imported bottled soft drinks within this state, to, for the privilege of engaging in such business, pay to the state for state purposes an amount equal to 1.9% of the person's gross receipts derived from such business. However, a person who is subject to and pays the bottled soft drink tax is not liable for the tax on gross receipts derived from sales of bottled soft drinks outside of this state. This bill reduces the tax from 1.9% to 0.9% of the person's gross receipts derived from such business within the state. As used in this law, "bottled soft drinks" include any and all nonalcoholic beverages (which contain less than 0.5% alcohol by volume), whether carbonated or not, and all bottled preparations commonly referred to as soft drinks of whatever kind or description that are closed and sealed in glass, paper, metal, plastic, or any type of container or bottle, whether manufactured with or without the use of syrup. However, fluid milk with or without flavoring, natural undiluted fruit juice or vegetable juice, cider, and pure fruit juice concentrate to which no additive has been made, with only water being necessary to be added to restore the juice to its natural state, are not bottled soft drinks. Allocation Present law requires revenue generated from the increase in tax rates from 1.5% to 1.9% to be allocated to the highway fund for the purpose of funding programs for the prevention and collection of litter and trash. This bill requires of the 0.9% tax, that 0.5% of the revenue generated be allocated to the highway fund for preventing and collecting litter and trash; and 0.4% be allocated to recycling grants issued by the department of environment and conservation for the purpose of funding material recycling programs. Reporting No later than March 31 of each year, present law requires the department of transportation to transmit to the governor, the speaker of the house of representatives and the speaker of the senate a report listing the programs receiving funds for preventing and collecting litter, the amount of funds received by each program, and the purpose for which the funds were spent. This bill, instead, requires the department of transportation and the department of environment and conservation to send the report. Out-of-State Sellers Present law requires a person located outside this state who distributes bottled soft drinks in this state to, for the privilege of engaging in such business, pay the tax on gross receipts derived from bottled soft drinks distributed by the person in this state in the same manner as does a person located in this state. A person importing or causing to be imported bottled soft drinks into this state from outside the state and selling such imported soft drinks within this state is not required to pay the tax, if the person's out-of-state supplier of bottled soft drinks has paid the tax. This bill removes these provisions. Miscellaneous Present law requires the tax to be administered and collected by the commissioner of revenue. This bill removes this provision. Present law requires the bottled soft drink tax to be repealed on July 1 of any year following the enactment of any state or federal law that imposes mandatory deposits by consumers on beverage containers sold in this state or on July 1, 2028, whichever occurs first. This bill, instead, requires such a repeal on July 1 of any year following an enactment of any state or federal law that imposes mandatory deposits by consumers, taxes, or fees on beverage containers or sold in this state or on July 1, 2028, whichever occurs first.

Statutes affected:
Introduced: 57-5-201(a)(1), 57-5-201, 57-5-201(a)(2), 57-5-202(a), 57-5-202, 57-5-205, 67-4-402(b), 67-4-402