Associated Press HELENA - A federal tax on businesses that sell alcohol is outdated and unfair and needs to be eliminated, Sen. Max Baucus, D-Mont., said Tuesday.
Baucus joined three Republican senators, including Sen. Conrad Burns of Montana, in introducing legislation that would do away with the federal "bar tax," that all establishments selling, making or distributing alcohol must pay each year.
"This is an unfair tax that has outlived its original purpose and is a clear example of why we need to simplify federal taxation," Baucus said in a news release. "I intend to wipe this tax off the books."
The tax was first instituted more than 200 years ago, with the revenue going into the U.S. Treasury. It was repealed in 1817, but reinstated during the 1860s to generate additional revenue during the Civil War. It has been on the books ever since.
"This is not what Congress had in mind 150 years ago, and I don't believe it is a situation we want today," Baucus said. "It's an antiquated tax that is bad for business."
Baucus said the tax is unfair because the owner of a business, such as a convenience store, must pay the $250 fee for every retail outlet.
Manufacturers pay even more. Distilleries and breweries, regardless of the size, each pay $1,000 annually.
In Montana, more than 3,300 businesses are subject to the tax, including 3,170 retail businesses. Baucus said those businesses pay more than $1 million in bar taxes annually.
Baucus said the measure is supported by a broad-based group of business organizations, including the Montana Tavern Association.
Nationwide, the tax raises about $126 million.