Liquor Tax Hike Will Cost Michigan Hospitality Jobs, Distilled Spirits Industry Warns Governor

February 7, 2007 07:00 PM

Governor's proposal would cost 1,800 jobs

LANSING, MI – Governor Jennifer Granholm’s proposed tax increase on distilled spirits would be a devastating blow to Michigan’s hospitality industry, according to an industry economic analysis, which showed that Granholm’s tax increase on liquor would destroy 1,800 hospitality sector jobs.

“The Governor’s tax on distilled spirits will devastate Michigan’s hospitality industry,” said Cathy Pavick, Executive Director of the Michigan Licensed Beverage Association.  “This will affect everyone from bartenders to busboys – not to mention the small business owners who will have to watch more and more customers travel across state lines to get their alcohol.”

Under the governor’s proposal, the state would increase the “mark-up” on spirits from the current high of 65% to 75%, amounting to an additional 10 percentage point increase for consumers.  Michigan already has the highest tax rate in the region.

“Michigan’s spirits taxes are already nearly four times as much as those in Indiana,” said David Wojnar, Vice President of the Distilled Spirits Council. “If Michigan raises its tax even higher, consumers will cross the border to shop and dine, which would drain Michigan’s tax revenues even more.”

Wojnar noted that half the price of a typical bottle of spirits in Michigan already goes to taxes and fees. 

“On the one hand, the Governor has made boosting tourism a top priority for Michigan,” Wojnar said.  “On the other hand, she slaps a tax on tourism related businesses and their workers.  That just doesn’t make good business sense.”

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