By a vote of three-to-two, the state Board of Equalization approved a  change to the way “flavored malt beverages” are taxed.  Currently drinks like Smirnoff Ice are taxed as beer at 20-cents a gallon.  The board’s ruling will change that to the distilled spirits rate of three-dollars and thirty cents.   Board of Equalization Member Judy Chu voted in favor—she says the drinks should be taxed as spirits. 

“It has a fermented base of beer, but in reality it has distilled spirits flavoring and it’s also heavily marketed towards youth…”

Chu says the price increase will discourage underage drinkers.  But Marc Sorini with the Flavored Malt Beverage Coalition says the issue should not be handled by the Board.

“This is really about the law and the tax code and for that reason we think they’re wrong to take the vote.” 

Opponents say the tax increase will hurt small businesses—such as family-owned restaurants.