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Sin Tax on booze - exactly how much is it?

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islandjoan
(@islandjoan)
Trusted Member

Does anyone know exactly how much the sin tax has added to booze?

The reason I ask, is that I checked the price of Trapiche Pinot Noir at Plaza East the other day. I hardly ever drink and so I was just checking the price of my favorite cheap wine to see how much it went up due to the sin tax. It had always been $5.99 and it is now $9.49!!!!

Seems to me the price is marked up WAY OVER what it should be with the addition of the sin tax. And that Plaza is just raping customers by increasing the price however they want.

In trying to find the exact amount of the sin tax on booze, I found this on News of St John:

When the Governor first released his sin tax plans a few months back, he called to increase the tax on a case of domestic beers from $1.55 to $11.55, the tax on foreign beers from $2.08 a case to $14.08 a case, and the tax on wine, spirits and other liqueurs to 10 percent of their value. Finally the Governor proposed a $30 per day tax on every timeshare unit for each day of occupancy in the Territory.

We heard that the numbers decreased a little bit prior to the signing of the bill, but as with most government things down here, the exact figures have been shrouded in secrecy. As soon as we know the exact figures and how it will affect bars and restaurants, we will certainly let you know.

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Topic starter Posted : May 10, 2017 12:18 pm
gringojj
(@gringojj)
Advanced Member

From what I understand the tax is paid at the wholesale level. Mark-up at the retail level is usually done at a percentage, then rounded off(usually up) to attractive numbers like 2.99 etc. So we will probably see items with increases that are proportionately more than the tax itself. A single beer that was 2 dollars will probably go up to 3, even though the sin tax only adds 59 cents to the beer.(these numbers arent accurate its just for example) I dont blame the retailers. Remember with the additional cost of the item, they may sell less, and have to make more on each item now. The effects of this tax remain to be seen....

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Posted : May 10, 2017 5:48 pm
islandjoan
(@islandjoan)
Trusted Member

Even with that, a $3.50 increase seems crazy high. I would blame the retailer! I think they are taking advantage of the situation.

Good thing I drink like maybe 1 glass of wine in a month, these days, and that's it for my alcohol consumption.

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Topic starter Posted : May 10, 2017 5:55 pm
gringojj
(@gringojj)
Advanced Member

Blame the government. Retailers do not like raising prices. In this case the gvt has forced them.

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Posted : May 10, 2017 6:50 pm
sjointer
(@sjointer)
Advanced Member

Even with that, a $3.50 increase seems crazy high. I would blame the retailer! I think they are taking advantage of the situation.

Good thing I drink like maybe 1 glass of wine in a month, these days, and that's it for my alcohol consumption.

Luckily, I don't drink. but islandjoan is right: the resulting tax has an additional markup that makes the new price nearly double the original! Anything that smells like a near 100% increase is, in my opinion, the fault of the retailer. This happens a LOT with fuel prices. Any kind of hiccup in the Middle East, and watch how gas prices soar.

Blame the government. Retailers do not like raising prices. In this case the gvt has forced them.

One of the most important business concepts that I've heard or read is: retailers shouldn't charge what it costs to create/obtain the revenue generating inventory...they should charge what they believe their consumers are willing to pay. "Sin Tax" retailers understand that the public is expecting to pay more, so the price jump is extra profiteering...the price is what they expect the general public is willing to pay. The OP didn't look at his cheap wine bottle, say "Oh HELLLL NO", and walk away. The OP still bought the wine. He demonstrated to the retailer that they have the right price, or maybe they need to bump it up slightly until they see a negative consumer shift (that is, the people start saying "oh HELLLL NO" ).

I would be interested in knowing what local bars do to their prices. They sell by the glass or bottle, not the case. I'd expect the prices at bars, casinos, and the like to be more than double!

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Posted : May 10, 2017 7:14 pm
islandjoan
(@islandjoan)
Trusted Member

Sjointer, oh you have it wrong!

I am the OP and I did NOT buy the wine!!!!!
I won't pay nearly double for the same thing. I MIGHT shop around and see how the other retailers marked it up, just out of curiosity.

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Topic starter Posted : May 10, 2017 7:26 pm
gringojj
(@gringojj)
Advanced Member

Also remember if people still buy the marked up items at the same level as before, the retailer will pay additional gross receipts tax because now there monthly gross sales gross has gone up. This additional tax they pay will be passed on to the consumer. We like to blame the retailer but they have to make money or they will go out of business.

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Posted : May 10, 2017 7:44 pm
islandjoan
(@islandjoan)
Trusted Member

And if I find that the same bottle of wine is cheaper elsewhere on island, that will mean that plaza east is ripping us off, because the retailers must all get the same wine from the same distributor(s) and pay the same price.

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Topic starter Posted : May 10, 2017 9:39 pm
Jumbie
(@ohiojumbie-2)
Trusted Member

Adding $3.50 to a bottle of wine when 10% added to price would make it + $.60 /bottle + $5.99 or $6.59. $9.49 is blatant greed.

Bend over -- Apparently the gov't is gonna put it to you & on top of that the some merchants are really gonna hose you.

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Posted : May 10, 2017 9:50 pm
islandjoan
(@islandjoan)
Trusted Member

I agree Jumbie and furthermore, I suspect that most retailers jacked the prices up immediately on May 1, on existing inventory as well as new inventory. I don't think all the booze at plaza was imported with the tax in effect. Surely they have inventory that was in the store before May 1.

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Topic starter Posted : May 10, 2017 11:44 pm
stxem
(@stx-em)
Trusted Member

Here's a breakdown of the Sin Tax:
$5.00 per case of domestic beer (24 beers)
$6.08 per case imported beer (24 beers)
$0.50 per bottle effectively for wine
$0.50 per bottle of liquor.
$8 per keg of beer
$11 per carton of cigarettes
I can't remember what the soda tax was. Not huge.

I own a business with a liquor license. My distributor came and talked to me about the price increases. It's really not that bad. I'll be raising the price of imported beers I sell by $1, keeping domestic the same (I don't charge cents, all my prices are an even dollar figure). Wines by the glass will not change much, a couple may go up a dollar depending on how I had priced them to begin with. Mixed drinks will depend on the soda increase cost.

The hardship will be for the distributors who have to pay the Sin Tax before the product is released by customs/excise. It amounts to $1000's in extra upfront money. They are going to get a lot stricter with people and balances. I have no clue what plaza, cost u less etc are planning. There was no difference in price today when I went to stock up. But if they raise their prices more dramatically than the distributors, they will lose business from businesses who are able to buy from the distributor.

It's really not that bad and I think people are freaking out over nothing. The final bill was a 57%
Reduction overall from the original bill's figures.

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Posted : May 11, 2017 12:32 am
rotorhead
(@rotorhead)
Trusted Member

How long will it be before they come up with a "goodness" tax and start taxing the churches?

The Tennis Club gets taxed.
The Yacht Club gets taxed.
The God Club should be taxed.

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Posted : May 11, 2017 12:36 am
Scubadoo
(@Scubadoo)
Trusted Member

Foreign Beers – $6.08 per case of 24-12 ounce containers or equivalent
U.S. Beers – $5.00 per case of 24-12 ounce containers or equivalent
Foreign kegs – $8.25 per keg
U.S. kegs – $5.70 per keg
Cigarettes – $11.00 per carton
Carbonated Drinks – $1.44 per case of 24-12 ounce containers or equivalent
Rums, Liquors, vodka and other alcoholic beverages – $6.00 per case

With this the increase on a bottle of wine should be minimal likewise for draft beer or wine by the glass. Retailers deal with lots of inventory, Trying to keep track of old inventory/old price paid and new inventory/new price paid is a lot of work. Much easier to just ball park when to make the price adjustment per item. Changing all the pricing on May 1st would be a bit lazy.

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Posted : May 11, 2017 12:38 am
gringojj
(@gringojj)
Advanced Member

Here's a breakdown of the Sin Tax:
$5.00 per case of domestic beer (24 beers)
$6.08 per case imported beer (24 beers)
$0.50 per bottle effectively for wine
$0.50 per bottle of liquor.
$8 per keg of beer
$11 per carton of cigarettes
I can't remember what the soda tax was. Not huge.

I own a business with a liquor license. My distributor came and talked to me about the price increases. It's really not that bad. I'll be raising the price of imported beers I sell by $1, keeping domestic the same (I don't charge cents, all my prices are an even dollar figure). Wines by the glass will not change much, a couple may go up a dollar depending on how I had priced them to begin with. Mixed drinks will depend on the soda increase cost.

The hardship will be for the distributors who have to pay the Sin Tax before the product is released by customs/excise. It amounts to $1000's in extra upfront money. They are going to get a lot stricter with people and balances. I have no clue what plaza, cost u less etc are planning. There was no difference in price today when I went to stock up. But if they raise their prices more dramatically than the distributors, they will lose business from businesses who are able to buy from the distributor.

It's really not that bad and I think people are freaking out over nothing. The final bill was a 57%
Reduction overall from the original bill's figures.

Its interesting to hear from a business owner that is directly affected by this tax.

It sounds like you will be paying more for your alcohol but not changing prices much. Do you think that the extra money you make on imported beers will offset the less you will be making on the other alcohol?

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Posted : May 11, 2017 12:53 am
Scubadoo
(@Scubadoo)
Trusted Member

It sounds like you will be paying more for your alcohol but not changing prices much. Do you think that the extra money you make on imported beers will offset the less you will be making on the other alcohol?

Back to market pricing again, what the buyer is willing to pay. Pricing that was already a little high or had higher margin can probably absorb the tax without change. Pricing that may already have been lower for market and with less margin will probably need a boost.

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Posted : May 11, 2017 1:12 am
vicanuck
(@vicanuck)
Expert

I get my after work Heineken from Stop & Save across from the Canegata Ball Park. The price is currently $2 and will increase to $3 shortly. Sigh.

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Posted : May 11, 2017 11:09 am
vicanuck
(@vicanuck)
Expert

How long will it be before they come up with a "goodness" tax and start taxing the churches?

The Tennis Club gets taxed.
The Yacht Club gets taxed.
The God Club should be taxed.

I agree 100%...churches should be taxed like any other business.

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Posted : May 11, 2017 11:10 am
Gator's Mom
(@gators_mom)
Trusted Member

Churches are not even required to file annual form 990s like other charitable organizations.

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Posted : May 11, 2017 12:41 pm
LiquidFluoride
(@LiquidFluoride)
Trusted Member

I get my after work Heineken from Stop & Save across from the Canegata Ball Park. The price is currently $2 and will increase to $3 shortly. Sigh.

I get mine from queen bee gas station on center line for $1.50... west is best 😉

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Posted : May 12, 2017 1:20 am
Exit Zero
(@exit-zero)
Trusted Member Registered

same old prices on beer and cigarettes at Pueblo yesterday.

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Posted : May 12, 2017 12:26 pm
islandjoan
(@islandjoan)
Trusted Member

Plaza west today-all the Trapiche wines are $5.99 (except for the "oak barrel" or something like that, which is their higher priced wine.) I couldn't find the Pinot noir so I got the merlot.

Lately plaza west has been beating most of the plaza east prices...these days more than ever you really need to shop around.

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Topic starter Posted : May 14, 2017 7:09 pm
STTsailor
(@STTsailor)
Trusted Member

The price of Heineken didn't budge at CostUless. 😎

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Posted : May 14, 2017 7:44 pm
Deb D Vegas
(@Deb_D_Vegas)
New Member

I was at price smart today and a carton of cigs were only $2.00 more than before the sin tax. So I keep hearing $11.00 but so far i haven't seen it

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Posted : May 15, 2017 11:08 pm
Exit Zero
(@exit-zero)
Trusted Member Registered

cigarettes and Heinken same price as before at STT CU Less Saturday - coke products were $5.29-- 12 pax however..... $3.98 last week at Pueblo.

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Posted : May 16, 2017 12:10 am
Pdmargie
(@Pdmargie)
Advanced Member

So,....if one was to "provision" a sailboat in the BVI and come back to the USVI. What would customs do with a boat full booze,....or even just soda??? Are beverages more or less expensive in the BVI???

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Posted : May 17, 2017 11:12 am
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