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Brewing giant MillerCoors pushing tax break on pear cider

Pear ciderState lawmakers are moving to put apples and pears on equal footing, at least for tax purposes.

Legislation awaiting House action would extend the same low tax rates that now exist for apple cider to also include anything brewed from pears. The difference is significant: Pear cider is now taxed at 84 cents a gallon, the same rate as beer; the rate for apple cider, considered a wine, is just 16 cents.

But none of this is designed to help pear growers in Arizona — the few of them there are in Cochise County. Instead it’s a bid by MillerCoors LLC, which now produces a pear cider, to make it cheaper for retailers and bars to sell its product.

It’s called Fox Barrel Pacific Pear Cider.

It ain’t cheap. A Phoenix retailer is offering a four-pack of 12-ounce bottles for $6.49.

And it’s not like the change, already pushed through the Senate, would make a big difference to shoppers. With the gallonage tax pro-rated, the cost would drop just a quarter — assuming that either MillerCoors or any retailers pass on the savings to customers.

No one from the brewing giant would return repeated messages.

But John Mangum, the company’s lobbyist, told lawmakers they should not worry about the financial impact of the change, at least as it affects the state’s coffers, given how little pear cider actually is sold in the state — perhpas in the neighborhood of just 2,740 gallons a year. He said the current levy on pear cider probably brings in just $2,300 a year; with the change, Mangum pegged the total tax collection at just $438.

“So, it doesn’t have a great revenue impact,” Mangum testified to members of the Senate Finance
Committee. “But it does matter to people who grow pears and make pear cider.”

The bid to lower taxes on pear cider came as a surprise to Annie Holcomb. She operates Apple Annie’s orchard near Willcox.

“I’ve never even heard of it,” she told Capitol Media Services.

And Holcomb said it’s not like lower taxes and perhaps an increased interest in pear cider would be any help to her.

“It’s not a big commercial crop,” she said. “We don’t even grow enough for our customers to pick.”

But Sen. Steve Yarbrough, R-Chandler, who agreed to sponsor the bill for Mangum and his client, said he never saw it as an economic development issues.

“My view was just trying to see pear cider get treated the same as apple cider,” he said.

The Senate-passed measure gained the unanimous blessing this week from the House Ways and Means Committee. But committee members made one significant change: It now applies to all “pome fruits.”

That change was suggested by Sean Laux, lobbyist for the state Department of Revneue, who admitted he actually didn’t know until now that there was such a category as pome fruits. It turns out that includes not only apples and pears, but also a few lesser-known fruits like loquat and quince.

Laux said that’s the way it’s already classified under federal tax laws.

“It just seemed to make sense from a statutory construction perspective to say, if there’s anything else out there that may be considered ‘cider,’ that’s an equivalent in the future, rather than trying to address every single instance, just be consistent,” he said.

To this point, only Sen. David Farnsworth, R-Mesa, has cast the sole vote against the measure. An aide said, though, it has nothing to do with this specific proposal, saying “he always votes ‘no’ on gambling and liquor bills.”

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