In case you missed it, a tax hike on booze is just around the corner.
As part of the financing package for the state’s $31 billion public works program, Illinois residents will be paying more for items including soft drinks and candy. A tax on booze could affect consumers indirectly because the fees liquor wholesalers pay for distilled spirits, wine and beer all are rising under the tax plan scheduled to go into effect Tuesday.
The tax on a fifth of vodka, whiskey and other distilled spirits distributed to retailers would jump 90 percent, from 90 cents to $1.71. The levy on a bottle of wine would leap about 87 percent from, 15 cents to 28 cents. The tax on a six-pack of beer would rise 25 percent, from 10.4 cents to 13 cents.
Officials say the money will pay for delayed repairs to roads, schools and bridges. A recently filed lawsuit challenging the legality of the funding package is unlikely to prevent the higher levies from going into effect. While the tax doesn’t mean shoppers will pay more at the register, it could still have an effect on their wallets.
“There is nothing subtle or easy about this tax; it is simply a massive punch in the face,” David Azizinamini, owner of Blue Line in Wicker Park, told Metromix in August. He figures the additional tax will add up to thousands over the next year. “The bottom line is that we will be forced to pass the costs on to our guests, which we do not want to do.”
Greg Mohr, co-owner of The Fifty/50, is taking the wait-and-see-approach, intending to hold onto the bar’s daily specials as long as possible. “We’re going to … just weather it and hope we can do more business to make up for the extra cost.”
Other spots might dock their offerings in an attempt to recoup. “One option we are seriously considering is scaling back our options in alcohol and beer,” says Steven Milford, co-owner of Wild Pug and Crew in Uptown, the latter of which stocks 68 kinds of beer. “With fewer options, we would go through more products quickly, earning us money back sooner.”
– – –
Bar tabs
Booze is just one of the items subject to the tax hike scheduled for Tuesday. RedEye hit the bars this weekend to ask drinkers what they think about it.
Alexia Elejalde-Ruiz, REDEYE
Jordan Wilkow, 32, of Lincoln Park
“I think that there are things like booze that society can consider indulgences and it’s OK to tax those a little more. Insofar as I think a sin tax is acceptable, it becomes doubly incumbent on government to use that money well. It’s got to be used efficiently.”
Drinking: Miller Lite
Mary Graves, 23, of the Gold Coast
“It’s not even a surprise to me; I feel like our city has the highest tax in the country. I don’t think I’ll notice, because most college bars are all wristband specials anyway. But it’s going to affect candy? Now that I’ll be upset about.”
Drinking: Blue Moon
James Jeffries, 30, of South Shore
“This is just the worst time to be adding another tax on top of all the other taxes, with the economy being how it is. I don’t think it’s that significant of an increase where it will affect how much I drink, but it’s a situation where people are getting tired of it.”
Drinking: nothing … yet
Anthony Sacco, 31, of the Loop
“I wouldn’t make a conscious decision to drink less. I think most people who are liquor drinkers will cut back on something else, like groceries.”
Drinking: Guinness
Amanda Ulloa, 27, of the South Loop
“I don’t buy a lot of alcohol so I don’t think it’s going to affect me that much. I just hate when they raise anything, like the CTA fare last year. It’s an annoyance.”
Drinking: Jack Daniel’s & Coke
Sarah Cole, 26, of the Gold Coast
“I suppose if they’re going to tax something, it’s better that they’re taxing things like liquor and candy and snacks, because those are indulgences. It’s probably not going to affect me. There are enough specials and enough promotions that you can always find a cheap drink.”
Drinking: Hacker-Pschorr
– – –
Did you know …
The 10.25 percent sales tax applied to general merchandise purchases in Chicago is one of the highest in the state, but it’s not the highest.
That distinction belongs to the sales-tax levies in west suburban Bellwood, where 11.5 percent is added to sales in two specially designated business development districts and 10.5 percent is added in the rest of the town.
The sales-tax rate in northwest suburban East Dundee also tops out at 10.5 percent, but only in the part of the town that lies in Cook County. A portion of East Dundee is within Kane County, which unlike Cook does not levy a county sales tax, so the total rate there ranges from 8.5 percent to 9 percent depending on location.
To find out the total sales-tax rate in your community, see https:// www.revenue.state.il.us/app/trii/ TRIBUNE
– – –
The existing sales tax
How it breaks down
Aggregate sales-tax rates vary from community to community. In Chicago, the total tab on general merchandise purchases is 10.25% and breaks down this way:
6.25%
state tax
1.25%
city tax
1.75%
Cook County tax
1%
Regional Transportation Authority tax
Groceries
Groceries and drugs get taxed at a reduced and uniform rate of 2.25% across Cook County and 1.75% across Lake, Will, DuPage, McHenry and Kane Counties.
In Cook, it breaks down this way:
1% state tax
1.25% RTA tax
(The RTA tax is 0.75% in collar counties.)
SOURCE: TRIBUNE REPORTING
– – –
Key Sept. 1 tax hikes
Candy
Candy, unless it contains flour as an ingredient, will no longer be eligible for a large sales-tax break applied to most groceries. In practical terms, the tax on a Reese’s Peanut Butter Cup purchased in Chicago will leap from 2.25% to 10.25%. A Twix bar, which contains flour, will still be taxed at 2.25% in Chicago.
Soft drinks
Many non-carbonated soft drinks also will no longer be taxed as groceries, with the rate leaping from 2.25% to 10.25% in Chicago. If a bottle of Gatorade now costs $1.02 including tax, the cost will rise to $1.10 or $1.11. (This paragraph as published has been corrected in this text.)
Booze
Taxes on booze also leap, but in an indirect way that probably — but not necessarily — will be passed on to consumers. Illinois liquor wholesalers are currently taxed 90 cents for every fifth of vodka, whiskey and other distilled spirits they distribute to retailers in the state, and that will jump to $1.71 — a 90% increase. The levy on a bottle of wine will leap about 87% from 15 cents to 28 cents. For a six-pack of beer, the tax jumps 25 percent from 10.4 cents to 13 cents.
SOURCE: TRIBUNE REPORTING
– – –
Coming by the end of the year
By the end of the year, fees for license plates and driver’s licenses will also be increased.
Annual license plate renewals for most motor vehicles will rise from $78 to $99. The charge for motorcycles goes from $19 to $39.
New and renewed driver’s licenses will cost $30, up from $10.
