Maryland's attorney general says that so-called "alcopops" should be treated like hard-liquor products under the law, but some members of the state legislature want sweetened alcoholic drinks like Smirnoff Ice and Mike's Hard Lemonade classified and taxed like beer.

With support from Senate President Thomas V. Mike Miller, the Maryland Senate easily passed a bill (HB 879) this week to classify alcopops as beer for taxation purposes. Backers said the legislation was needed to bring Maryland's law into line with a 2003 federal Tax and Trade Bureau ruling that alcopops should be classified as beer as long as no more than 49 percent of the alcohol in the products is derived from distilled spirits.

Critics, however, say the real intent of the alcohol industry and its supporters is to keep alcopop prices low so they remain affordable to young customers; federal studies have shown that the sweet alcoholic drinks are a favorite of underage drinkers. Under Maryland law, liquor is taxed at $1.50 per gallon, while beer is taxed at just 9 cents per gallon. "That's a sweet deal for producers but bad public policy," said the Baltimore Sun in a March 20 editorial opposing the legislation.

"The real story is that this has been the industry's warpath for the last few years," said Michele Simon, research and policy director at the Marin Institute. "About half the states clearly say that any product with distilled is classified as such, but the industry has figured out the way around that is to go to the states and change state laws to match the federal law."

At least six states -- Tennessee, Minnesota, Missouri, Washington, Oregon and Virginia -- have amended their laws to conform to the TTB definitions, according to Jim Mosher, director of the Center for the Study of Law and Enforcement Policy at the Pacific Institute for Research and Evaluation (PIRE).

The Maryland legislation -- which was introduced right before a holiday weekend, debated at a hearing scheduled on President's Day, and fast-tracked through the Senate -- is now before the House of Delegates for consideration.

Even some opponents of the bill concede that the measure has a good chance of passage in the House, pointing to Maryland's history of low alcohol taxes and the fact that supporters of the bill have framed a vote against the measure as a vote for a "tax increase" -- a tactic that may be especially effective in the wake of a bruising special legislative session where a number of state taxes were raised to close a $1.7-billion budget gap.

Ironically, Maryland has always taxed alcopops as beer, not liquor, even though the TTB itself found that the flavored malt beverages (FMBs) currently on the market derive most of their alcohol from distilled spirits. The industry may have been spurred into a bid to codify the current tax treatment by Attorney General Douglas Gansler's February opinion on alcohol classification, as well as recent legislation in California and Utah to classify alcopops as liquor. "People are waking up to fact that these products have been misclassified thanks to the industry's duplicity," said Marin's Simon.

John Colymers, secretary of the Maryland Department of Health and Mental Hygiene, requested the ruling from Gansler in February, noting, "If FMBs were subject to the higher distilled-spirits tax rate, this could have positive public health implications," since "these sweet, often fruit-flavored malt beverages are popular with adolescents."

In his response to Colymers and a letter to the General Assembly opposing legislation to classify alcopops as beer, Gansler said that FMBs are not "flavored beers" but rather liquor products, and that Maryland is under no obligation to conform its law to the TTB rules.

"Passing this legislation will make it easier for young people and underage youth to obtain distilled spirits by making alcopops available in more retail outlets and taxing them at a lower rate," added the Maryland chapter of the National Council on Alcoholism and Drug Dependence in its Feb. 18 testimony before the House Health and Government Operations Committee.