#1. Legislative history

N. 1 The Confederation's competence to levy special consumption taxes has its roots in the Federal Constitution of 1874. Alcohol taxation dates back to Art. 32bis aFC (adopted 1885), while tobacco tax was first incorporated into the Constitution in 1952.

N. 2 During the total revision of 1999, the various consumption tax competences were consolidated in Art. 131 FC. The Federal Council's message on the new Federal Constitution noted: «The consolidation of all special consumption taxes into a single provision increases the clarity of the Constitution» (BBl 1997 I 1, 394).

N. 3 Paragraph 2bis, inserted in 2021, responded to the financing needs of aviation infrastructure and enables a surcharge on aviation fuel when ordinary resources are insufficient.

#2. Systematic classification

N. 4 Art. 131 FC belongs to Title 3 of the Federal Constitution on Confederation, Cantons and Communes and appears in Chapter 3 on the financial system. The provision is systematically closely linked with:

• → Art. 105 FC (Alcohol), which regulates substantive legislative competence for spirits
• → Art. 134 FC (Exclusion of cantonal and communal taxes), which prohibits similar cantonal consumption taxes
• → Art. 130 FC (Value added tax), which as a general consumption tax forms the counterpart to special consumption taxes
• ↔ Art. 86 FC (Use of charges for road traffic)

N. 5 The special consumption taxes under Art. 131 FC are steering taxes with fiscal character. They pursue both financing and health and environmental policy objectives.

#3. Elements of the offence / Normative content

#a) Concept of special consumption tax

N. 6 Special consumption taxes are selective levies on certain goods and services. Unlike value added tax as a general consumption tax, they only cover products exhaustively listed in Art. 131 FC.

N. 7 Collection typically occurs during production or import, not at final consumption. The tax is passed on to consumers through the price.

#b) Taxable objects under para. 1

N. 8 Tobacco and tobacco products (lit. a): The term encompasses raw tobacco and all products made from it for smoking, snuffing or chewing. The taxation of tobacco substitute products such as electronic cigarettes is disputed. In the view of the Federal Administrative Court, a careful and comprehensive interpretation shows e-cigarettes to be subject to tobacco taxation. The Federal Council, however, expressly classifies them as substitute products not subject to the tax.

N. 9 Spirits (lit. b): According to the extensive legal definition in Art. 2 AlcA, this includes all beverages with an alcohol content exceeding 15 percent by volume as well as beverages with lower alcohol content if the alcohol was not obtained exclusively through fermentation. The Federal Court confirmed this broad interpretation in BGE 143 II 409.

N. 10 Beer (lit. c): This covers all beverages produced from grain malt through alcoholic fermentation, regardless of alcohol content. The separate listing alongside spirits is historically motivated.

N. 11 Automobiles and their components (lit. d): Automobile tax was abolished in 2007. The constitutional basis continues to exist but could no longer be activated without constitutional amendment.

N. 12 Petroleum, other mineral oils and motor fuels (lit. e): This tax has primarily fiscal character for financing road infrastructure. It covers fossil fuels and combustibles as well as their substitutes.

#c) Additional charges under para. 2

N. 13 The mineral oil tax surcharge (para. 2 lit. a) currently amounts to 30 centimes per litre on all motor fuels except aviation fuel. The earmarking for road infrastructure results from → Art. 86 FC.

N. 14 The charge on alternative propellants (para. 2 lit. b) is intended to ensure equal treatment of fossil and alternatively powered vehicles. Concrete implementation is still pending.

#4. Legal consequences

N. 15 Art. 131 FC establishes a federal competence, not an obligation to levy taxes. Design occurs at the legislative level (TobTA, AlcA, MinOTA, BeerTA).

N. 16 According to → Art. 134 FC, similar cantonal and communal taxes are excluded. However, the Federal Court recognises cantonal cost allocation taxes with specific purpose. Thus it declared a Vaud charge of 0.8% on alcoholic beverages for takeaway to be permissible as a cost allocation tax that is consistent with federal law and justified on grounds of youth protection.

N. 17 Revenues from taxation of spirits are partially earmarked: 10% of net revenue goes to the cantons to combat the causes and effects of addiction problems (para. 3). This earmarking is justiciable.

#5. Points of dispute

N. 18 Electronic cigarettes: The qualification of e-cigarettes as tobacco products is highly disputed. The Federal Administrative Court takes an extensive interpretation and affirms tax liability. The Federal Council rejects this and defines e-cigarettes as non-taxable substitute products. Bärtschi advocates for legislative revision to clarify (Bärtschi, in: Beusch/ISIS [ed.], Entwicklungen im Steuerrecht 2009, 381 ff.).

N. 19 Home distilling privilege: Matteotti/Gerber criticise the constitutional permissibility of tax privileges for domestic small distilleries as a violation of legal equality (Matteotti/Gerber, in: FS Reich, 23 ff.). Practice maintains the historically founded privilege.

N. 20 Scope of cantonal competences: Vallender favours a restrictive interpretation of Art. 134 FC and thus expanded cantonal scope for steering charges (Vallender, in: Schweizerisches Steuer-Lexikon, Vol. 1, Sondersteuern). Federal Court jurisprudence shows restraint and only allows cantonal charges with clear cost allocation character.

#6. Practice notes

N. 21 For import of products, correct tariff classification is decisive. The customs administration applies complex demarcation criteria for mixed products (e.g. alcoholic soft drinks). BGE 143 II 409 provides important guidelines.

N. 22 For spirits manufacturers, the distinction between commercial and domestic production is central. Home distilling rights are subject to strict quantity restrictions and personal requirements.

N. 23 When planning cantonal prevention charges, the boundary to consumption taxes excluded under federal law must be carefully observed. The charge must have specific cost allocation character and may not be primarily fiscally motivated.

N. 24 Mineral oil tax refunds for licensed transport companies and agriculture follow complex procedures. Beneficiaries should observe refund deadlines (generally 3 years).

Case law on Art. 131 BV focuses mainly on the delimitation between federal consumption taxes and cantonal levies, as well as the qualification of products as taxable objects.

#I. Constitutional foundations

BGE 143 II 409 of 29 November 2013 (Bacardi-Martini)

The Federal Supreme Court confirmed the broad interpretation of federal competence for consumption taxes on spirits. The decision deals with the taxation of beverages containing freeze-concentrated wine upon importation.

«Art. 105 BV declares legislation on the production, importation, purification and sale of spirits to be a federal matter; in doing so, the Confederation must take particular account of the harmful effects of alcohol consumption. According to Art. 131 para. 1 let. b BV, the Confederation may levy a special consumption tax on spirits, among other things.»

#II. Concept of spirits

BGE 143 II 409 of 29 November 2013

The Federal Supreme Court clarified that the term "spirits" in Art. 131 para. 1 let. b BV is to be interpreted extensively. Products containing alcohol that was not obtained exclusively through fermentation fall under federal competence.

«With this extensive legal definition, the powers of the Confederation are expanded to a certain extent, insofar as the wording of Art. 105 BV, if understood narrowly, could only cover those types of ethyl alcohol produced by distillation. However, since the broader scope of application laid down in Art. 2 AlkG is expressly intended by the legislature, this formulation enshrined in a federal act is binding on both the Federal Supreme Court and the other law-applying authorities.»

#III. Delimitation from cantonal levies

Judgment 2P.316/2004 of 31 October 2005

Fundamental decision on the admissibility of cantonal levies on spirits alongside the federal tax. The Federal Supreme Court examined the Thurgau levy on the sale of spirits.

«Legislation on the production, importation, purification and sale of spirits is a federal matter; the Confederation shall take particular account of the harmful effects of alcohol consumption (Art. 105 BV, Art. 32bis old BV). The Confederation may levy special consumption taxes on spirits (Art. 131 para. 1 let. b BV, Art. 32bis para. 5 old BV).»

Judgment 9C_759/2023 of 18 January 2024

Most recent decision on cantonal alcohol levies and their relationship to Art. 131 BV. The case concerned a canton's standing to appeal against decisions regarding alcohol levies.

«According to Art. 131 para. 1 let. b BV, the Confederation may levy a special consumption tax on spirits, among other things. [...] What federal legislation designates as the subject of value added tax, special consumption taxes, stamp tax and withholding tax, or declares tax-free, may not be burdened by the cantons and communes with taxes of the same kind (Art. 134 BV).»

#IV. Tobacco tax

Judgment 2C_723/2013 of 1 December 2014

Important decision on tobacco tax under Art. 131 para. 1 let. a BV. The case concerned the assessment of tobacco tax on water pipe tobacco.

The Federal Supreme Court confirmed federal competence for tobacco taxes and their practical implementation in customs procedures.

BVGer A-1211/2018 of 11 March 2019

Decision on tobacco tax on cannabis products. The Federal Administrative Court confirmed that cannabis products for smoking purposes are subject to tobacco tax as tobacco substitute products.

#V. Private distilleries

BVGer A-477/2018 of 11 September 2018

Decision on licences for private distilleries and their relationship to Art. 131 BV. The case concerned the right to distil spirits.

«Art. 105 BV declares legislation on the production, importation, purification and sale of spirits to be a federal matter. The Confederation takes particular account of the harmful effects of alcohol consumption.»

#VI. Use of proceeds

BVGer A-3346/2020 of 27 April 2022

Decision on the earmarking of proceeds from consumption tax on spirits according to Art. 131 para. 3 BV.

BVGer A-2514/2021 of 2 February 2022

Further decision on the use of funds from the taxation of spirits for combating addiction problems.

#VII. Procedural aspects

BVGer A-1359/2018 of 11 March 2019

Parallel decision to A-1211/2018 concerning tobacco tax on cannabis products. Confirmation of the federal administration's competence for levying consumption taxes.

BVGer A-4178/2016 of 28 September 2017

Decision on customs procedures in connection with consumption taxes under Art. 131 BV.

BVGer A-5752/2015 of 15 June 2016

Procedural decision on the collection of monopoly charges on spirits upon importation.

#VIII. Current developments

Judgment 9C_759/2023 of 18 January 2024

Most recent published decision of the Federal Supreme Court on Art. 131 BV. The case shows the continuing importance of the delimitation between federal and cantonal competences in the area of consumption taxes.

Case law consistently confirms the comprehensive federal competence for special consumption taxes and its restrictive interpretation in favour of cantonal tax sovereignty only in clearly delineated areas.