California Can't Redefine Malt Beverages to Increase Tax Rate, Court Says

The State Board of Equalization exceeded its authority when it adopted regulations in 2008 to tax flavored malt beverages as distilled spirits instead of beer to increase the tax rate, a state appellate court rules. The California Court of Appeals reverses a February 2009 trial court ruling in favor of SBOE upholding the regulations. The reversal is a win for the Flavored Malt Beverage Coalition and Diageo-Guinness USA Inc., which filed a lawsuit challenging the regulations in 2008, immediately after they became final.