Alcohol Sales Drop After Maryland Increases Sales Tax

By Paul Gaita 04/15/16

Could a higher sales tax contribute to a decrease in drinking?

Alcohol Sales Drop After Maryland Increases Sales Tax
Photo via Shutterstock

A drop in alcohol sales in Maryland has been linked to an increase in the sales tax, according to a new study from the Johns Hopkins Bloomberg School of Public Health.

The research, published in the American Journal of Drug and Alcohol Abuse, found alcohol sales decreased by nearly 4% after Maryland increased its tax on alcohol from 6% to 9% in 2011. Liquor sales experienced the greatest decrease (5.1%) while beer and wine sales dropped by 3.2% and 2.5% respectively in the 18 months after the tax increase.

The study's findings suggest that a higher sales tax can work just as well to reduce alcohol consumption as raising excise taxes on alcohol (taxes levied on manufacturers), according to a university release. “The vast majority of existing research on the public health impact of alcohol taxes has examined alcohol excise taxes, which are based on the amount of alcohol in a container, but not its price,” said study co-author David Jernigan, director of the Hopkins’ Center on Alcohol Marketing and Youth. "The findings of this paper suggest that increased alcohol sales taxes may be as effective as increased excise taxes in reducing alcohol consumption."

Studies have already drawn hypothetical connections between increased excise taxes on alcohol and a drop in alcohol consumption among high-risk drinkers (defined as those who binge-drink, drive under the influence of alcohol and drink in excess of the U.S. Dietary Guidelines over a 30-day period). These studies predict that since high-risk drinkers consume more alcohol and therefore pay more alcohol taxes, increasing alcohol excise or sales taxes could be enough to spur many high-risk drinkers to reduce their intake by nearly 10%, according to one study published in the American Journal of Preventative Medicine.

Maryland’s sales tax on alcohol has also had a significant, if unexpected impact on its residents: cases of gonorrhea infection in the state dropped from 7,400 in 2010 to below 5,700 in 2012 even as infection rates continued to rise across the country, the Baltimore Sun reported last year. The researchers who conducted the study said the rise in the alcohol sales tax was the only way they could explain this phenomenon, especially since drinking booze is associated with a higher incidence of risky sexual behavior. Similar findings about the relationship between alcohol taxes and sexually transmitted disease cases were found in other states including Illinois and Massachusetts, they said.

Please read our comment policy. - The Fix

Paul Gaita lives in Los Angeles. He has contributed to the Los Angeles Times, Variety, LA Weekly, and The Los Angeles Beat, among many other publications and websites.