
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, May 9, 1990                   TAG: 9005090384
SECTION: VIRGINIA                    PAGE: B-2   EDITION: STATE 
SOURCE: Associated Press
DATELINE:                                 LENGTH: Medium

OLD LIQUOR TAX JARRING BUSINESSES

Sudden federal enforcement of a little-known alcohol tax dating back almost to the Civil War is hurting owners of small grocery stores and fraternal organizations, some of which have been slapped with thousands of dollars in back taxes, interest and penalties, a grocer said.

Gloucester County grocer Marvin Crane calls it a "read-my-lips tax."

He means that the sudden enforcement of the federal tax on the selling of alcoholic beverages, passed just after the Civil War, does not violate President Bush's campaign pledge of no new taxes.

Yet, it brings in more money for the government.

Crane owns two convenience stores and has been in the retail grocery business for several decades. He said he didn't know about it until last year.

Nor did his accountant, who Crane says was outraged by the tax's obscurity.

Nor, Crane said, did almost all of the other grocers he asked after learning of its existence last year from John DeMoss, Virginia Food Dealers Association president.

About 45 percent of businesses and groups that hold state licenses to sell alcoholic beverages may be delinquent in paying the $250 per store annual levy known as the "special occupational tax."

The U.S. Bureau of Alcohol, Tobacco and Firearms lists 8,555 Virginia licensees who paid the tax as of April 18. That compares with the 15,443 dealers licensed by the state Alcohol Beverage Control Board for retailing and wholesaling as of July 1, 1989.

ATF estimates a 40 percent delinquency rate nationally. DeMoss said most of the food dealers who didn't know of the tax owned small, independent businesses.

by CNB