Additional Elements Connected to Annual Tax Revenue

(This is a brief description – to read the entire initiative click on the Pdf link on the home page.)

• This initiative petition retains the 17% tax markup on spirituous liquor and wine sold to military installations by the department listed under 32B-2-304 and enacts 17% tax markup from spirituous liquor and wine sales made by manufacturer licensees licensed under Chapter 11, Manufacturing and Related Licenses Act, and direct shipping wholesalers licensed under new Chapter 20, Direct Shipping Wholesaler License Act.

• This initiative petition terminates Package Agency Agreements under 32B, Chapter 2, Part 6 to establish a new off-premise retail license type known as 32B, Chapter 2, Part 6 Package Agency License, thereby allowing package agencies to profit from the sale of liquor. This will reduce government costs by $3,365+ million annually.

  • Currently there are 146 Package Agencies in Utah. The population of Utah is approximately 3.271 million. The quota for package agencies is 18,000 allowing for 181 package agencies. The quota is decreased from 18,000 to 16,000 allowing 204 total package agencies – approximately 58 new licenses – or 23 over what the law now allows. This creates the ability for grocery and big-box stores to apply for a license within proximity requirements. Newly licensed package agencies will be required to sale spirituous liquor, wine, heavy beer, beer, and flavored malt beverages in an enclosed area establishing a barrier from the general public. 

  • Sets minimum markup standard on liquor pricing to be consistent with national MRSP and within guidelines for supplier discounts. The minimum percentage over wholesale at which alcoholic products for off-premise consumption may be sold at will be 13%.

    • This measure allows suppliers to issue cases discounts, a protocol that already exists at the UDABS. For example: for a product costing $9.99 on the shelf, a supplier may offer a case discount to get the shelf price down to $8.99, $7.99, $6.99, etc. A shelf price of $5.99 for a product costing $9.99 every day is a 40% discount. The minimum threshold over the 30% wholesale cost will be 13% = a max discount of 45% off the original shelf price using the state’s current 88% tax markup. This is well within the guidelines the UDABS is already using. 

• This initiative petition removes the responsibility of selling heavy beer and certain flavored malt beverages from the UDABS and authorizes beer wholesalers the task of selling these products and requires their suppliers remit 30% tax markup to the department. This will reduce inventory at the UDABS and therefore the cost of liquor, thus increasing profitability.

• This initiative petition authorizes Utah manufacturers, licensed under Chapter 11, Manufacturing and Related License Act, the capability to direct ship their products to licensees and remit 30% tax markup to the department on all in-state shipments. The current model of state-run retail distribution is discriminative and handicaps Utah manufacturers. A wholesale model allows them to compete against massive national and international brands. Fostering these valuable businesses benefits the state through added job creation, taxation, and infrastructure development.

• This initiative petition enacts new Chapter 19, Liquor Store License Act, allowing a person to buy or lease and apply for licensing to a previously run state-owned liquor store. The population quota for liquor stores is increased from 48,000 to 54,000 allowing fewer liquor store outlets due to a decrease in the package agency quota and licensing of new package agency outlets.

  • Currently there are 52 state liquor stores in Utah. The population is approximately 3.271 million. The quota for state liquor stores is 48,000 allowing for 68 stores. The quota is increased from 48,000 to 54,000 to allow for approximately 60 licenses – fewer licenses but 8 over what is now in place.

• The total number of outlets allowed to sell liquor under current quotas is 249 (68 state liquor stores and 181 package agencies). The citizens' initiative quotas will allow 60 liquor store licenses and 204 package agency licenses for a total of 264 outlets allowed to sell liquor: a difference of +15 licenses.