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News Tue Aug 25 2009

Looking at the Upcoming Liquor Tax

You may have seen some liquor stores advertising about the upcoming liquor tax increases that take effect September 1. Today the Chicago Tribune had an article that clarified some of this advertising--apparently Binny's has called this the largest alcohol tax increase in state history, but that's not technically true.

Semantics aside, Susan Hofer, spokeswoman for the Illinois Department of Revenue, was quoted as saying the new taxes wouldn't be so bad. "When you look at the price differential for each item you buy, it's not that much," she said.

Let's look at that price differential, shall we? Beer? The tax goes up from 10.4 cents to 13 cents a six-pack. Wine? The tax per bottle is going from 13 cents to 28 cents. Spirits? That one-fifth bottle you used to pay 90 cents tax on? Going to $1.71.

Although Hofer's argument could be valid for beer and wine, it's way off when you look at spirits. Honestly, the spirits tax is almost doubled. I personally think that's a pretty big price differential, especially considering that you also pay sales tax on top of these taxes. Adding a good couple of dollars to a bottle of spirits might actually be the straw that breaks the camel's back--or in this case, closes the wallet.

Chicago Hospitality / August 26, 2009 8:21 AM

Let's put this spirits tax hike in some (ugly) perspective.

After this tax kicks in on September 1st, every cocktail in Chicago will come with at least a dime in state spirits tax. That doesn't include the 10.25% and up worth of local sales taxes.

Illinois dime a drink tax is just the latest, and one of the more offensive, cases of the tax man nickel, dime, and quarter at a time assault on your disposable income.

Henry / August 26, 2009 9:07 AM

Again you don't get it. This tax is not being treated as a pass through. Since the distributor is paying the tax, they are putting in as a cost of goods. They then apply a margin to it and that is the price that goes to the retailer. The retailer then applies their margin and that is the price of the shelf. That $0.80 increase becomes a $2.00 increase. A $10 bottle of alcohol goes up 20% to $12. Get it???

bedava oyun oyna / May 15, 2010 8:38 AM


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