This State Just Passed a Bill to Increase Access to, Lower Taxes on Spirit-Based RTDs

The Vermont Legislature passed a bill that if signed into law will increase access to and lower taxes on spirits-based RTDs.

The Vermont Legislature last week passed HB 730, a bill that will increase access to and lower taxes on spirits-based ready-to-drink products. The bill will allow more private beer and wine retailers to sell spirits-based RTD products and reduce the taxes on the products from $7.68 per gallon to $1.10 per gallon.

“Not only are Vermont spirits consumers inconvenienced by having to go to a separate store to purchase spirits-based ready-to-drink cocktails, but they also incur higher prices due to the excessive tax burden placed on these products,” Jay Hibbard, Distilled Spirits Council of the United States senior vice president of state government relations, said in a news release. “There is no reason products with the same or similar alcohol content should be taxed at such wildly varying rates. Creating a more equal tax rate for spirits-based RTDs will support Vermont’s distillers, lower costs for consumers and bring in revenue for the state. We thank the Legislature for moving this measure forward and encourage Governor Scott to sign the bill.”

The bill now heads to Governor Phil Scott (R-VT) for signature.

DISCUS has worked with state-based spirits trade groups to lower the state excise tax on RTDs in a number of states across the country in an effort to have RTDs taxed similarly to beer. Twenty-four states have lower tax rates for lower-ABV spirits-based products, per DISCUS. At least 12 states have introduced bills so far this year to “create a more level playing field for spirits-based RTDs in support of consumers and small businesses in their communities,” DISCUS said in the news release.

The RTD market blew up during the early phases of the COVID-19 pandemic as drinkers lost the option to sip cocktails in bars amid shutdowns and sought home cocktails without the effort of buying the ingredients and mixing them.

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