California State Board of Equalization (BOE) Makes Historic Decision

SAN RAFAEL, CA (August 14, 2007) --- The California State Board of Equalization (BOE), under the strong leadership of State Controller John Chiang, made history today when the agency approved a rulemaking process to tax alcopops as distilled spirits, at $3.30 per gallon, instead of the current beer tax rate of .20 per gallon. The decision was immediately applauded by prevention and youth advocates from the California Coalition on Alcopops and Youth, the group that initiated the effort with a petition to the BOE last fall.

“Flavored malt beverages should be taxed as distilled spirits because they fall under the category of distilled spirits, as written in California law,” said Chiang in a written statement. “While today’s vote is about fair taxation,” he added, “taxing flavored malt beverages as liquor will also help reduce their popularity with young people by simply pricing the product out of their reach.”

	Vanessa Madrid, 17, presents the BOE with 3,250 postcards signed in favor of higher alcopop taxes. Photo by Randy Branch/Sacremento Bee

“This is an enlightened step forward in controlling underage consumption of alcohol,” said Bruce Lee Livingston, executive director of Marin Institute. “For years, Big Alcohol has evaded proper taxation on these products. Now, both the state and our youth will benefit.”

A recent Marin Institute report detailed the costs of alcopops consumption among underage youth in California. The study estimated that alcopops cost California $1.25 billion and cause 60 deaths annually. With the new tax in place, the lives of 21 youth could be saved. The new tax is expected to reduce underage alcopop consumption in the state by 35 percent, resulting in a cost savings of $437 million.

“Public policy trumped corporate politics today,” said Michele Simon, research and policy director at Marin Institute. “It’s a great victory not just for the youth of California but for other states that are waiting on this decision to move forward. If we can do it, so can they,” she added.

In addition to Controller Chiang’s “yes” vote, board members Judy Chu and Betty Yee also voted for the tax increase. Members Bill Leonard and Michelle Steele voted no. The proposed tax could increase the average price of alcopops by an estimated 25% and generate over $40 million for the state treasury. In addition, the funds could be used for alcohol prevention programs and emergency medical center expenses.