DISCUS

Record-Breaking Alcohol Tax Increase Won't Win Olympics for Illinois

May 20, 2009 08:00 PM

Proposed Tax Hike Would Cost 4,500 Hospitality Jobs

SPRINGFIELD, IL – The Illinois State Senate last night passed a spending package including a 90% increase in the state excise tax on alcohol, according to the Distilled Spirits Council of the United States which blasted the proposal as a job-killing tax on the hospitality industry at a time when the state is trying to attract global tourists. 

“Hamstringing the hospitality industry with increased alcohol taxes will cost jobs and hurt tourism throughout the state – not to mention punish the very same businesses the state must lean on for a serious Olympic bid,” said Council Vice President Dale Szyndrowski.  “This tax will actually make Chicago’s spirits tax rate 78% higher even than the rate in New York City,” he said, noting that such an increase will drive tourists and business travelers into nearby Wisconsin and Indiana.

Under an amendment to House Bill 255, the current excise tax on spirits in Illinois would increase from $4.50/gallon to $8.55/gallon – a 90% increase.  The legislation passed the Senate last night and is currently under consideration in the House. 

Szyndrowski stated that the Illinois hospitality industry is already struggling, citing over 18,700 hospitality jobs lost in the past year alone due to the recession.  He 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 another 4,500 hospitality sector jobs across the state.  The analysis also shows that in the year following the July 1999 tax increase ($2.00/gallon to $4.50/gallon) spirits volumes actually declined by approximately 13%.

“Policymakers need to understand that a tax on alcohol hurts the entire hospitality industry,” he said.  “Forcing thousands of waiters, waitresses, bartenders and busboys into the unemployment line is no way to improve the state economy.”

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