"If the alcohol industry doesn't pay the two or three million dollars a year, it comes from somewhere else." That's the argument from Attorney Vince Powers who argued to the Nebraska Supreme Court that flavored malt beverages should be considered spirits and not beer.

If the State Attorney's General's office gets its way it will come from other sources than the tax revenue generated from so called alcopops.

The State Supreme Court heard appeal arguments Thursday after a District Court ruled the alcopops are considered spirits, now beer, which comes with lower taxes.

"The law says if a beverage contains alcohol by distillation, it shall be considered a spirit. A spirit is taxed higher than beer. This isn't beer, everybody who goes to the liquor store knows this isn't beer," said Powers.

Beer is taxed at 31 cents per gallon. Spirits are taxed at 3.75 per gallon, about 12 percent more resulting in 2 million dollars a year more to the state.

The Attorney General's office maintains it's in the beer category. "What we're saying is that they are beverages that contain alcohol by fermentation. The District Court also agreed that an argument could be made that flavored malt beverages meet the definition of beer," argued Milissa Johnson-Wiles of the State Attorney General's office.

A third leg in the ruling comes from a place of concern for younger Nebraskans and that's where Project Extra Mile comes in.

"The District Court ruled in our favor that alcopops are distilled spirits which ultimately raises the price on the product and we know kids are price sensitive when it comes to purchasing alcohol and that's ultimately why we got in the fight," said Cassandra Greisen of Project Extra Mile.

It's a fight that will not be settled until likely early next year when the Supreme Court is expected to rule.