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California reduces taxes on flavored malt beverages

Published 05 June 2012

California has reduced alcoholic beverage taxes on certain flavored malt beverages such as hard lemonade, hard ice tea, Smirnoff Ice and flavored wines by 94% from $3.30 to 20 cents a gallon.

The State Board of Equalization has decided not to appeal the Third District Court of Appeals decision in May 2012 that the board's attempt to change the distilled spirits definition did not withstand even relaxed scrutiny that a court gives to regulations.

Board of Equalization member Michelle Steel told the Orange County Register that wine and beer manufacturers will once again be able to follow a single, clear definition when producing and selling their products.

The malt liquor tax increase was approved by the board in 2008 on flavored malt beverages following a request from California Youth Council, Students Making a Community Change and California Friday Night Live Partnership.

However, the Flavored Malt Beverage Coalition and Diageo-Guinness USA in Connecticut sued the board as exclusive power over alcohol's sale and taxation lies with the Department of Alcoholic Beverage Control.

Companies are now allowed to claim refunds of overpaid alcoholic beverage tax, reported the website.