RELATING TO LIQUOR.

HB535

HOUSE OF REPRESENTATIVES

H.B. NO.

535

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to liquor
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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The legislature finds that alcohol
consumption contributes to hundreds of deaths each year in Hawaii.
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According to the United States Centers for
Disease Control and Prevention, there were an average of three hundred
eighty-four alcohol-attributable deaths per year in Hawaii between 2011 to
2015.
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Of those deaths, approximately
ninety per cent were due to excessive alcohol use, which includes binge
drinking, heavy drinking, and any drinking by pregnant women or people under
the age of twenty-one.
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It is estimated
that excessive alcohol use shortened the lives of those who have died in Hawaii
by an average of 27.2 years.

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The legislature further finds that,
although it is often assumed that most excessive drinkers are alcohol
dependent, one study found that ninety per cent of excessive drinkers did not
meet the criteria for alcohol dependence.
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The most widespread form of excessive alcohol use is binge drinking,
which is defined as consuming four or more drinks during a single occasion for
women and five or more drinks during a single occasion for men.
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Heavy drinking is considered as consuming
eight or more drinks per week for women and fifteen or more drinks per week for
men.

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The legislature additionally finds
that there are several short- and long-term health risks associated with
excessive alcohol use.
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The immediate
health risks of excessive alcohol use may include injuries, such as motor
vehicle crashes, falls, drownings, and burns; violence, including homicide,
suicide, sexual assault, and intimate partner violence; alcohol poisoning; and
risky sexual behaviors, such as unprotected sex or sex with multiple partners,
which can result in unintended pregnancy or sexually transmitted diseases.
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For pregnant women, excessive alcohol use may
result in miscarriage and stillbirth or fetal alcohol spectrum disorders.
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Over time, excessive alcohol use can cause
chronic diseases and other serious problems including high blood pressure,
heart disease, stroke, liver disease, digestive problems, certain types of
cancer, a weakening of the immune system, learning and memory problems, mental
health problems, social problems, and alcohol use disorders or alcohol
dependence.

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In addition to the health risks
associated with excessive alcohol use, the legislature notes that excessive
alcohol use contributes to significant economic costs to the State, including
health care, lost productivity, and criminal justice costs.
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According to a 2010 study, the estimated
total cost of excessive alcohol use in Hawaii was $937,400,000, or $1.58 per
drink, with the state government paying 39.4 per cent of these costs, which
translate to $369,200,000, or 62 cents per drink.

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The legislature also finds that if
the State assessed a 5‑cent surcharge per 1.5 ounces of distilled
spirits, five ounces of wine, and twelve ounces of beer, the projected revenue
would total $32,000,000.
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A 10-cent
surcharge would result in projected revenues of $62,700,000.
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Despite these projected revenues, a 10-cent-per-drink
surcharge would only nominally increase costs for most individuals.
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An individual who excessively consumes
alcohol would pay nearly $27 per year as a result of the 10-cent surcharge,
whereas a non‑excessive drinker would pay less than $5 per year.
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Individuals who abstain from alcohol would
pay nothing.

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The purpose of this Act is to
establish a three-year surcharge on the liquor tax.

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SECTION
2
.
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Section 244D-4,
Hawaii Revised Statutes, is amended to read as follows:

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�244D-4
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Tax; limitations.
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(a)
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Every person who sells or uses any liquor in
the State not taxable under this chapter, in respect of the transaction by
which the person or the person's vendor acquired the liquor, shall pay a
gallonage tax that is hereby imposed at the following rates for the various
liquor categories defined in section 244D-1:

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On July 1, 1998, and thereafter, the tax
rate shall be:

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(1)
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$5.98
per wine gallon on distilled spirits;

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(2)
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$2.12
per wine gallon on sparkling wine;

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(3)
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$1.38
per wine gallon on still wine;

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(4)
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$0.85
per wine gallon on cooler beverages;

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(5)
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$0.93
per wine gallon on beer other than draft beer; and

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(6)
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$0.54
per wine gallon on draft beer;

and
at a proportionate rate for any other quantity so sold or used.

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(b)
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The tax levied pursuant to subsection (a) shall be paid only once upon
the same liquor; provided [
further
] that the tax shall not apply to:

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(1)
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Liquor held for
sale by a permittee but not yet sold;

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(2)
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Liquor sold by one
permittee to another permittee;

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(3)
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Liquor which under
the Constitution and laws of the United States cannot be legally subjected to
the tax imposed by this chapter so long as and to the extent to which the State
is without power to impose the tax;

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(4)
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Liquor sold for
sacramental purposes or the use of liquor for sacramental purposes, or any
liquor imported pursuant to section 281-33;
and

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(5)
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Alcohol sold
pursuant to section 281-37 to a person holding a purchase permit or
prescription therefor, or any sale or use of alcohol, so purchased, for other
than beverage purposes.

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(c)
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Beginning July 1, 2025, and ending June 30,
2028, every person subject to the liquor tax imposed under subsection (a) shall
pay a surcharge on the liquor tax of cents per
drink.
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The surcharge shall be imposed
per:

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(1)
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1.50 ounces of
distilled spirits;

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(2)
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Five ounces of
sparkling wine or still wine; and

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(3)
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Twelve ounces
of cooler beverages, beer other than draft beer, or draft beer.

The proceeds from the surcharge shall be
deposited into the general fund.
"

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SECTION 3.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.

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SECTION 4.
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This Act shall take effect upon its approval;
provided that this Act shall be repealed on June 30, 2028, and section 244D-4,
Hawaii Revised Statutes, shall be reenacted in the form in which it read on the
day prior to the effective date of this Act.

INTRODUCED BY:

_____________________________

Report Title:

Liquor
Tax; Surcharge

Description:

Establishes a three-year surcharge on the liquor tax.
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Repeals 06/30/2028.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.