The bill amends Washington State's taxation laws concerning low-proof beverages and spirits. It introduces a new definition for "low-proof beverage," specifying it as any beverage that is 16 ounces or less and contains more than 0.5 percent but less than seven percent alcohol by volume, excluding wine, malt beverages, or malt liquor. A tax of $2.50 per gallon is established for the sale of low-proof beverages, which must be paid by spirits distributors, distilleries, and craft distilleries. Additionally, the bill modifies existing tax rates on spirits, maintaining the retail sales tax at 15 percent and the distributor sales tax to restaurant retailers at 10 percent, while updating the additional tax on spirits sales to $1.72 per liter and an additional 14 percent tax on specified subsections.

Moreover, the bill clarifies the definition of "spirits" for tax purposes, excluding mini-bottles sold by licensed restaurants until July 1, 2023, and low-proof beverages as defined in existing law. It specifies that mini-bottles are containers holding no more than 50 milliliters. The bill also introduces new tax rates for different types of spirits sales, including a tax of seven cents per liter on sales to restaurant retailers and a new tax of $1.33 per liter. All revenues from these taxes are mandated to be deposited into the state general fund by the 25th day of the following month, aiming to streamline the tax structure and enhance clarity in the taxation of spirits sales.

Statutes affected:
Original Bill: 66.24.630, 66.24.055, 82.08.150
Substitute Bill: 82.08.150