Don't Mess With Taxes

It's not unusual to simultaneously think of taxes and an alcoholic beverage.

No, no, no, no, no! I am NOT advocating you fill out your 1040 while under the influence.

But I heartily support the sentiment that personal finance blogger Mrs. Micah espoused on Twitter: "chips and salsa is a perfect reward for taxes or beer."

My Texas tax geek heart was filled to the brim with joy at the thought of folks celebrating the completion of their annual filing chores by enjoying a Tex-Mex snack and a cold one.

But there's another connection between booze and taxes -- the excise taxes that are collected at both federal and state levels on alcoholic beverages.

The Treasury Department's Alcohol and Tobacco Tax and Trade Bureau keeps track of the current federal levies on various types of booze.

On the state level, the Tax Foundation has a 2009 rate table, and the Center for Science in the Public Interest's Alcohol Policies Project offers more links to various data on states and alcoholic beverage taxation.

State alcohol tax actions: Some state lawmakers, however, want to make changes to their jurisdictions' current alcohol taxes.

In Georgia, there's a movement to allow retail stores to sell beer and wine on Sundays.

Supporters say the added excise tax collections from the extra day of sales could be just what the Peach State needs to close its $2-billion-plus budget gap.

But, as NPR reports, some folks argue that no amount of money is worth selling liquor on the Lord's day. Such expanded sales hours have been tried before and failed. We'll just have to see if the economy is bad enough this time to change some public and legislator minds.

Across the continent we have lawmakers in Oregon who, according to MauledAgain, are contemplating a beer excise tax increase of at least 1,808 percent. Under the proposal, blogs law professor Jim Maule, the per-barrel excise tax on beer producers in the Beaver State would go from $2.60 per barrel to $49.61 per barrel.

Of course the additional funds from the new tax would go to good causes, primarily to pay for alcohol and drug abuse treatment and recovery programs.

They have that many people in the Pacific Northwest that need rehab? Really? Amy Winehouse, I've found your new home!

A tax break for brewers: On the federal level, however, some members of Congress want to make sure that booze isn't taxed too much.

Rep. Earl Pomeroy (D-N.D.), a member of the tax-writing Ways and Means Committee, has introduced H.R. 836, the Brewers Excise and Economic Relief Act of 2009. Proving that a good brew can bridge almost any political divide, 85 House members from both sides of the aisle have signed on as cosponsors.

According to the Beer Institute and the Brewers Association, the bill would reduce federal taxes to $9 per barrel, and for small operations to $3.50 per barrel. The trade association says more than 40 percent of the retail price of beer is due to different taxes.

If those Representatives can enable their constituents to enjoy less expensive brews, then they likely have jobs on Capitol Hill for life!

Writing off an evening out: If you have your own business and part of your job is schmoozing with clients and customers, then you probably support lower lower alcohol excise taxes.

But regardless of what Washington, D.C., or state capital lawmakers eventually do in regard to various booze taxes, don't forget that you can write off part of the costs of doing business over a good steak and ale.

This deduction was cut in 1986 to its current 50 percent of the cost of legitimate business meal and entertainment costs. There have been efforts since then to increase the deduction amount.

Supporters of an increase say that restaurants are small business owners' preferred place for conducting meetings outside of the office. That means that the 50 percent rate is essentially an added tax on the self-employed and small businesses.

Expect the business lobbyists, not to mention folks who represent restaurants, to continue their push for an increased deduction amount.

Until then, though, your best bet is to carefully track all your breakfast, lunch and dinner business meetings and hang onto the receipts.

The IRS has more details on the meal deduction, as well as other ordinary and necessary business travel expenses you might be able to claim in order to help reduce your small business tax bill.