Purchasing Restrictions and State Taxation on Distilled Spirits.
Abstract
Defense Appropriation Acts from FY 1986 through FY 1996 required nonappropriated fund instrumentalities to purchase distilled spirits only from in-state sources in Alaska and Hawaii. Although the purchasing provision in Alaska and Hawaii expired at the end of FY 1996, nonappropriated fund instrumentalities continued to comply with the provision in FYs 1997 and 1998. Additionally, Washington requires that distilled spirits purchased for resale on DoD installations in the state be purchased from the Washington State Liquor Control Board. Nonappropriated fund instrumentalities include the Army and Air Force Exchange Service (AAFES), the Navy Exchange Service Command (NEXCOM), and the Marine Corps Personnel and Family Readiness Division (formerly the Morale, Welfare, and Recreation Support Activity). Distilled spirit sales by AAFES, NEXCOM, and the Marine Corps Personnel and Family Readiness Division totaled $17.5 million in Alaska, Hawaii, and Washington in 1996. The audit was requested by the Executive Director, Morale, Welfare, and Recreation and Resale Activities in the Office of the Assistant Secretary of Defense (Force Management Policy). This is the second audit report in response to the request. Inspector General, DoD, Report No. 98-126, "Economic Distribution of Distilled Spirits Within DoD," April 30, 1998, discussed the most economical method of distributing distilled spirits within DoD. Objectives. The primary objective was to determine whether the military exchange systems provided the most economical method of distribution of distilled spirits within DoD. A second objective was to determine whether the use of commercial distributors rather than the AAFES and NEXCOM network for distribution of distilled spirits resulted in taxation to nonappropriated fund instrumentalities. This report discusses the second objective and purchasing restrictions in Alaska, Hawaii, and Washington.
Document Details
- Document Type
- Technical Report
- Publication Date
- Oct 29, 1998
- Accession Number
- ADA367658
Entities
People
- Carolyn A. Swift
- Michael A. Joseph
- Raymond D. Kidd
- Shelton R. Young
- Timothy J. Tonkovic
Organizations
- Office of the Inspector General, U.S. Department of Defense