City law amended to add a provision for use tax on alcoholic beverages

The City of Bethel Council passed an ordinance that would amend the Bethel Municipal Code (BMC) regarding sales taxes, adding a provision for a use tax on alcoholic beverages.

The details of Ordinance 18-15 are as follows:

In 1998, the City of Bethel did an extensive rewrite of the sales tax code. The 1998 version of the sales tax code included a provision for a use tax on the use, consumption and sale of alcoholic beverages.

The use tax was levied in Bethel from April 1999 when the new sales tax code went into effect, until 2009 when the citizens of Bethel voted to remove the local option restriction then in effect.

In 2016, the City of Bethel began the process of updating the sales tax code. Because a use tax cannot be levied unless the community is in a local option status, the committee did not consider reinstating the use tax.

In October of this year the issue of returning to local option will once again be before the voters of Bethel. While the outcome of the vote is unknown, having both the alcohol tax and the use tax in the BMC can only be a benefit, states Ord. 18-15.

Which tax is applicable depends on the City’s alcohol status and having both ordinances in the BMC is not contradictory.

If the City voters elect to remain wet, the current alcohol tax will be the only one legally applicable and therefore the only one that can and will be enforced. The use tax would simply remain in a dormant status.

And, if the City voters elect to return to local option, the current alcohol tax will be the one that become dormant while the use tax will automatically become active.

The City of Bethel currently imposes sales taxes at three different rates: 6% on regular items, 12% on lodging, and 15% on alcohol and marijuana.

The details of the Alcohol Use Tax state that the tax applied shall be at the same rate as the highest sale tax rate levied under the Sales Tax chapter. The buyer of the alcohol would pay the sales tax.

And, businesses operating outside the city limits receiving orders for alcoholic beverages to be shipped by the seller, seller’s agent or employee by common carrier to an address or person in the City, is responsible for tax collection and remittance to the City in the same manner as required for sales tax levied by the City.

Such sellers shall be liable for remittance of the use tax in the same manner as a person who is required to collect the City sales tax on the sale of other goods. The buyer shall be liable to the City for all use taxes not collected by a seller.

The ordinance passed by a vote of 5-1. Voting in favor was Mayor Rick Robb, and council members Leif Albertson, Mark Springer, Mitchell Forbes, and Brian Henry. Voting nay was council member Thor Williams.

The ordinance had an effective date of July 16th, 2018.