Olympic-sized Alcohol Tax Increase Threatens Illinois' Hospitality Industry

May 17, 2009 08:00 PM

--Proposed Tax Would Cost 4,500 Hospitality Jobs, Slash Tourism Efforts--

SPRINGFIELD, IL – The Illinois State Legislature is considering an anti-tourism proposal to nearly double the state excise tax on alcohol – a move chided by a coalition of hospitality business and the Distilled Spirits Council of the United States, which noted that such an increase would have a devastating ripple effect across the state hospitality and tourism industries at the worst possible time. 

“When the government is spending millions to boost tourism, I can’t think of a worse time to punish the very same hospitality businesses with increased alcohol taxes,” said Council Vice President Dale Szyndrowski.  “Visitors coming to Chicago may want to consider staying in Wisconsin or Indiana if they plan to eat at a restaurant or enjoy a cocktail at a bar.” 
Szyndrowski pointed to an economic analysis which showed that the proposed tax increase would cause Illinois retailers to lose an estimated $225 million in retail sales and a loss of 4,500 hospitality sector jobs across the state.  “Policymakers need to understand that a tax on alcohol hurts the entire hospitality industry – negatively impacting restaurants, hotels, bars, nightclubs and the thousands of men and women they employ,” he said.

Szyndrowski also pointed out that distilled spirits already are overtaxed considerably in Illinois with well over half of the price of a typical bottle of spirits going toward taxes.  In fact, such a tax would make Chicago’s spirits tax rate 77% higher even than New York City’s spirits tax rate, he said. 

“As hospitality businesses throughout the state continue to struggle through this economic downturn, now is the worst time to hit these same businesses with higher taxes on alcohol,” Szyndrowski said.  “These businesses will see more customers traveling across the border to Wisconsin, Indiana or Missouri to skirt the higher rate.  When this happens, Illinois will lose more than alcohol sales and taxes – the state will also lose the general business activity when these consumers fill up their gas tanks, buy food and clothing, or choose hotels across the border.”

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