Public Comments for 09/21/2021 Work Group to Assess the Feasibility of Transitioning to a Unitary Combined Reporting System for Corporate Income Tax Purposes
On behalf of the Molson Coors Beverage Company and our 500 employees based in Rockingham County, I am writing to request that the Work Group to Assess the Feasibility of Transitioning to a Unitary Combined Reporting System for Corporate Income Tax Purposes reject that proposal and maintain the current reporting systems for corporate income tax collections. For over 30 years, we have proudly been one of the largest employers in the Shenandoah Valley offering an ideal business climate and workforce needed to brew some of the biggest beer brands in the United States including Miller Lite, Coors Light, Blue Moon, Miller High Life and Keystone Light. In 1987, we chose Virginia over competing sites for a new brewery because of the access to natural resources, proximity to our wholesalers and most importantly because of the business-friendly environment of the Commonwealth. If this proposal were to be enacted, it would increase our Virginia tax burden by close to $2 million additionally per year which would make Shenandoah less competitive within our brewery network which could potentially hinder future investment and job creation. Several years ago, our brewery was chosen in the network to invest over $60 million to expand our capacity to brew up to 7.5 million barrels of beer per year. This investment in part was due to the business partnership in the state. If this proposal comes to fruition, we may not be selected for future growth and investment opportunities within our world class network. This could result in loss of revenue for the state and employment growth for the hard-working men and women in Rockingham County. I thought that I would provide the committee with a perspective of what we currently do and why it works for our business. • Corporate income tax – We currently use a double-weighted sales apportionment (Property plus Payroll plus Sales (x2). This double-weighted percentage was 10.3% in 2019. • Corporate taxes in other brewery states – As of 2020, Colorado, Georgia, Illinois (corporate headquarters), Texas and Wisconsin are all taxed solely based on sales. • Long-term disadvantages of switching to this type of taxation- MUCR is a complex, subjective and costly process that is not required in separate filing states and could result in expensive and time-consuming litigation. This change could result in our brewery being less competitive and could cost us the ability for long-term investment and updates within our network. This could impact job growth and other taxes currently paid in the state. • How much other taxes do we currently pay in Virginia – Based on our most recent annual tax filing we paid over $700k in property taxes, $50k in excise taxes, $100k in sales and use tax which is only in Virginia and close to $2.4 million in withholding taxes. If this proposal were to pass it would increase our tax burden in the state by close to $2 million additionally per year. • Local Tax – Virginia is the only state in our brewery network which we are assessed a local machinery and tools tax which adds substantially to our Virginia tax burden. We stand with the other Virginia companies as well as the Council on State Taxation (COST) in asking the work group to reject this proposal and maintain the current system for corporate income tax reporting and collection. We will be happy to answer any additional questions the group may have.