Nightly News   |  October 16, 2011

Big bucks in booze?

Dozens of cash-strapped state and local governments have changed their liquor laws hoping to bring in more money. NBC's Thanh Truong reports.

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LESTER HOLT, anchor: In these challenging times , state and local governments are constantly looking for new ways to generate much needed revenue. One area they're now tapping into is alcohol sales. NBC 's Thanh Truong has that story.

THANH TRUONG reporting: At Manuel 's Tavern in Atlanta , beer and business are flowing steadily, even during a rocky economy.

Mr. STEVEN PITTS (Manuel's Tavern General Manager): The reason that alcohol survives so well, people still need to see other people. You can't spend your life hiding inside of your house.

TRUONG: So state and city governments strapped for cash are tapping into the lucrative alcohol market. Economists say in lean times booze can be an easy source of new tax revenue .

Mr. TOM SMITH (Professor, Emory University): There's not a good substitute for these things. And so the products where there's not good substitutes are products that we can continue to tax, continue to generate more revenue.

TRUONG: To make up for shortfalls, more than a dozen states have adjust their liquor laws since the recession. Maryland expects to bring in an additional $85 million a year after recently raising its alcohol sales tax from 6 to 9 percent, igniting opposition from restaurants and bars.

Mr. PHIL BOWERS (Maryland Bar Owner): And they're putting these -- this tax on the back of our customers.

TRUONG: In Tennessee , officials hope the loosening of alcohol laws will attract a new brewery to the state. It also means visitors to the Jack Daniel 's distillery can soon sample the world's famous whiskey with higher sales and tax money in mind. And in Georgia , they're looking to change an old law to deal with new fiscal challenges. Voters here in Atlanta and throughout the state of Georgia will soon decide in a referendum whether a long-standing ban on the sale of alcohol on Sundays should be repealed.

Ms. YANAELLE CORNEZ (Manuel's Tavern Customer): You have no idea how many times I went to a supermarket trying to buy a bottle of wine, coming to the cashier and someone would tell me, 'No, it's Sunday, you can't do that.'

TRUONG: Atlanta City councilman Kwanza Hall says Georgia 's so-called blue law is outdated. Only Connecticut and Indiana have similar laws. Sunday sales in Georgia could generate an extra $5 million a year.

Mr. KWANZA HALL: To just allow people to do what they already do, but for the city to be able to generate additional revenue as a result of it, who loses?

TRUONG: So the next time you raise your glass, you may also be helping the economy. Here's to better times . Thanh Truong, NBC News, Atlanta .