Impact of Maryland’s 2011 alcohol sales tax increase on alcoholic beverage sales

ABSTRACT

Background: Increasing alcohol taxes has proven effective in reducing alcohol consumption, but the effects of alcohol sales taxes on sales of specific alcoholic beverages have received little research attention. Data on sales are generally less subject to reporting biases than self-reported patterns of alcohol consumption. Objectives: We aimed to assess the effects of Maryland’s July 1, 2011 three percentage point increase in the alcohol sales tax (6–9%) on beverage-specific and total alcohol sales. Methods: Using county-level data on Maryland’s monthly alcohol sales in gallons for 2010–2012, by beverage type, multilevel mixed effects multiple linear regression models estimated the effects of the tax increase on alcohol sales. We controlled for seasonality, county characteristics, and national unemployment rates in the main analyses. Results: In the 18 months after the tax increase, average per capita sales of spirits were 5.1% lower (p < 0.001), beer sales were 3.2% lower (p < 0.001), and wine sales were 2.5% lower (p < 0.01) relative to what would have been expected from sales trends in the 18 months prior to the tax increase. Overall, the alcohol sales tax increase was associated with a 3.8% decline in total alcohol sold relative to what would have been expected based on sales in the prior 18 months (p < 0.001). Conclusion: The findings suggest that increased alcohol sales taxes may be as effective as excise taxes in reducing alcohol consumption and related problems. Sales taxes also have the added advantages of rising with inflation and taxing the highest priced beverages most heavily.

KEYWORDS:

• Alcohol sales
• alcohol taxes
• alcohol consumption
• alcohol sales taxes
• alcohol policy
• prevention

Acknowledgments

The authors would like to thank the Maryland Comptroller’s Office for providing county-specific data on gallons of alcohol sold; and Alexander Wagenaar and Frank Chaloupka for reviewing earlier versions of this manuscript.

Funding

Mieka Smart’s participation in this study was funded by the Johns Hopkins Bloomberg School of Health Drug Dependence and Epidemiology training program (National Institute on Drug Abuse Grant T32DA007292). Preparation of this study was also supported in part by Cooperative Agreement Number [grant number 5U58DP002027] from the Centers for Disease Control and Prevention. The contents of this study are solely the responsibility of the authors and do not necessarily represent the official views of the National Institute on Drug Abuse of the Centers for Disease Control and Prevention.

Declaration of interest

The authors have no declarations of interest to report.

Notes

^1. We contacted the Worcester County and Cecil County Liquor Boards due to large variations in the monthly data for spirits. The Worcester County Liquor Board was only able to provide data on gallons of spirits sold in 2012, so data for 2010 and 2011 are from the Comptroller’s Office. Data were not attainable from Cecil County so we used the original data provided by the state.

Additional information

Funding

Mieka Smart’s participation in this study was funded by the Johns Hopkins Bloomberg School of Health Drug Dependence and Epidemiology training program (National Institute on Drug Abuse Grant T32DA007292). Preparation of this study was also supported in part by Cooperative Agreement Number [grant number 5U58DP002027] from the Centers for Disease Control and Prevention. The contents of this study are solely the responsibility of the authors and do not necessarily represent the official views of the National Institute on Drug Abuse of the Centers for Disease Control and Prevention.