What Happens Without Alcohol Sales Tax In Bethel?

Oct 7, 2019

The City of Bethel will lose alcohol sales tax from Caribou Trader's Liquor Store once its package liquor store license expires on January 6, 2020.
Credit Greg Kim / KYUK

When the liquor stores close under the state local option law, a large portion of the city’s alcohol revenue will disappear. The city estimated that it would earn $500,000 from alcohol taxes this fiscal year. 

Acting City Manager Bill Howell says that he isn’t worried about the loss this year. “Our budget year runs from July 1 to June 30, so we’ve got alcohol revenues coming in through January. So there’s about half a year of revenues from that,” Howell said.

He says that since the liquor store won’t close until 90 days after the election, the city will receive at least some of the projected $500,000 in revenue. Plus, the tax on alcohol isn’t necessarily going away. Under local option, there’s an alcohol use tax. It’s a tax on the storage, use, and consumption of alcohol in the city. Under local option, if you ship in alcohol from a liquor store in Anchorage, the liquor store will send the alcohol use tax to the city of Bethel.

If you fly in alcohol in your luggage, you’re supposed to inform the city’s finance department and pay taxes on the alcohol you bring in. City Clerk Lori Strickler admits that she doesn’t know how this will be enforced. There will still be alcohol revenue for the city, but as time goes on, Howell agrees that it won’t be as much as when the liquor stores were in business. 

“Going into the [Fiscal Year 2021] budget, we’re going to be taking a real close look at that.” 

But for this year, Howell doesn’t anticipate having to make any changes to the budget.