Two years after liquor privatization small businesses feeling th - Spokane, North Idaho News & Weather KHQ.com

Two years after liquor privatization small businesses feeling the impact

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Washington state privatized liquor sales in 2012 Washington state privatized liquor sales in 2012
SPOKANE, Wash. - It's the holidays and that means work parties, family get-togethers, and drinks with friends. But in Washington some people are saying buying booze is breaking the bank, and sales across the border, in Idaho and Oregon, are through the roof.

2 years ago Washington voters decided to privatize liquor sales. That allowed retail stores, like Costco and Safeway, to sell hard alcohol. The big benefit for consumers is convenience; but that comes at a steep cost. In Washington a gallon of alcohol costs $35. Before privatization that same bottle would be about $27. That $8 difference adds up.

Duane Harris bought Liberty Lake Liquor in 2011, just before the privatization kicked in. Duane says the first couple months were good, "then people realized how high the tax was. They started going to Idaho to buy liquor." That's an issue many liquor store owners in eastern Washington have to face. The problem, Harris says, is that a 20.5% sales tax, a $3.77 liter tax, and a 10% distributor tax add up. To compete with Idaho liquor store owners try to keep their prices down, but Harris says that's cutting into his bottom line.

Privatization isn't just hurting small businesses. Washington residents pay more per gallon of alcohol than any other state. And the promise of privatization was that taxing booze would help fill a budget hole. However, Washingtonians are spending far less on liquor than the state projected. That means the budget hole continues to grow, instead of shrink.

Harris says he's seen that firsthand. He says in 2012, his first year as owner, Liberty Lake Liquor brought in $1.3 million in gross sales. One year later, in 2013, Harris says his store brought in just $275,000. That's a difference of more than $1 million, and a difference that may force him to close his doors for good. "We're hoping that's not the case," Harris says. "This is a really fun business and I love doing it. I don't expect to make a lot of money, but I'd sure like to be able to make a living."


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