RELATING TO THE TAXATION OF LIQUOR.

SB2456

THE SENATE

S.B. NO.

2456

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to the taxation of liquor
.

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

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SECTION 1.
�
The
legislature finds that alcohol consumption contributes to hundreds of deaths
each year in the State.
�
According to the
United States Centers for Disease Control and Prevention, there was an average
of three hundred forty-nine alcohol attributable deaths per year in
Hawai
ʻ
i

between 2011 to 2015.
�
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.
�
It
is estimated that excessive alcohol use shortened the lives of those who died
in
Hawai
ʻ
i

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.
�

The most common 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.
�
Heavy drinking is defined 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.
�
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 sexual behaviors
that can result in unintended pregnancy or sexually transmitted diseases.
�
For pregnant women, excessive alcohol use may
result in miscarriage and stillbirth and any alcohol use during pregnancy may
cause fetal alcohol spectrum disorder.
�

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.
�

According to a 2010 study, the estimated total cost of excessive alcohol
use in
Hawai
ʻ
i

was $937,400,000 or $1.58 per drink, with the state government paying
39.4 per cent of these costs, which translates to $369,200,000 or $0.62 per
drink.
�
One approach to influencing
alcohol consumption in the State was examined in a 2022 white paper by the
university
of
Hawai
ʻ
i
at Mānoa Pacific Health
Analytics Collaborative
.
�
The
research found that increasing the liquor tax by a mere ten cents per drink
could save lives and also raise $58,000,000 or more in tax revenue.
�
The tax increase would also lead to a 6.9 per
cent decrease in alcohol consumption among adults, seven per cent reduction in
alcohol use disorders, and an increase in economic productivity by an
additional $5,900,000.

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Correspondingly, the legislature finds that
the last time the State increased the tax on liquor was in 1998.
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Costs have increased over the past twenty-eight
years and leaving the tax on liquor unchanged has had the practical effect of
reducing the tax.
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Thus, it is necessary
to adjust the liquor tax to reflect the true tax rate in today's dollars.
�
A reliable source is the United States
government's Consumer Price Index, or CPI, which measures the average price
changes for commonly purchased goods and services in the U.S. economy.
�
According to the CPI, today's prices are 1.98
times as high as average prices in 1998.
�

Alternatively, one dollar today only buys approximately fifty per cent
of what it could buy back in 1998.
�
Any
additional state revenue collected from the inflation adjustment in the liquor
tax will be deposited into the general fund and can be used for the prevention
and treatment of alcohol-related disorders such as substance use dependence,
health care services, mental health services, and fetal alcohol spectrum
disorders.

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Accordingly, the purpose of this Act is to
adjust the liquor tax for inflation.

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SECTION
2
.
�
Section 244D-4, Hawaii Revised Statutes, is
amended by amending subsection (a) to read as follows:

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"
(a)
�
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,
]
2026,
and thereafter, the tax rate shall be:

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(1)
�
[
$5.98
]
$11.84
per wine gallon
on distilled spirits;

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(2)
�
[
$2.12
]
$4.20
per wine gallon on
sparkling wine;

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(3)
�
[
$1.38
]
$2.73
per wine gallon on
still wine;

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(4)
�
[
$0.85
]
$1.68
per wine gallon on
cooler beverages;

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(5)
�
[
$0.93
]
$1.84
per wine gallon on
beer other than draft beer; and

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(6)
�
[
$0.54
]
$1.07
per wine gallon on
draft beer;

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

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Beginning
July 1, 2027, and every year thereafter, the gallonage tax that is imposed pursuant
to this section for the various liquor categories shall be adjusted using the Consumer
Price Index for All Urban Consumers (CPI-U) for Honolulu, or a successor index,
for the twelve months prior.
"

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SECTION 3.
�

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 on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

Taxation;
Alcohol; Liquor Tax

Description:

Increases
the liquor tax and adjusts it for future inflation.

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