By: Evan Halper

Under a new state law, beverages such as Smirnoff Ice are supposed to be taxed as liquor. But manufacturers say they've changed their recipes to continue fitting into the lower-taxed beer category.

Beverage makers admit they aren't paying the new taxes. They say they don't have to because they have reformulated the drinks -- more than 6,000 varieties -- to transform them into simple beers by limiting the amount of distilled spirits they contain.

They won't explain how. The formulas, they say, are trade secrets. And beverage-industry officials and federal regulators say there are no tests to determine how much distilled spirits the drinks contain.

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