CA Judge Thinks Mike’s Hard Lemonade Should Pay “Beer Tax” Rates

From the Orange County Register:

A state appeals court has struck down a 1,550% increase in excise tax on certain flavored malt beverages such as hard lemonade, hard ice tea and Smirnoff Ice.

These beverages have some characteristics of beer and some of distilled spirits, the court noted.

The Board of Equalization in 2008 approved a $3.30 a gallon tax, up from 20 cents a gallon on flavored malt beverages at the urging of the California Friday Night Live Partnership, Students making a community Change and the California Youth Council.

Diageo-Guinness USA Inc. in Connecticut and the Flavored Malt Beverage Coalition sued to block the change, saying the Department of Alcoholic Beverage Control has exclusive power over sale and taxation of alcohol, not the Board of Equalization. A trial court previously sided with the board.

The appeals court ruled that the board's attempt to change the definition of "distilled spirits" did not withstand even the "relaxed scrutiny" that a court gives to quasi-legislative actions such as regulations.  Full details here.

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