Pennsylvania Hospitality Jobs Coalition Blasts Local Tax Hike Proposal
–Urges legislators to reject job-killing tax hikes at the local level–
A coalition of Pennsylvania hospitality businesses and workers today blasted a recommendation by the Pennsylvania League of Cities and Municipalities (PLCM) to grant local governments the power to raise alcohol taxes – saying this tax increase would punish small businesses, hospitality workers and consumers.
The Pennsylvania Hospitality Jobs Coalition, comprised of a growing group of organizations across the Commonwealth and around the country, called the PLCM’s recommendation to increase alcohol taxes a job-killing burden on Pennsylvania’s hard-hit hospitality sector.
“Allowing local governments to impose drink taxes would be like signing new taxes on the dotted line,” said Patrick Conway, President & CEO of the Pennsylvania Restaurant Association. “Enabling municipalities to adopt drink taxes would quickly lead to a patchwork of local drink taxes across the Commonwealth, hurting Pennsylvania consumers and businesses at a time when they simply cannot afford to be hurting more,” Conway said.
During a press conference today, the PLCM called on state legislators to allow local governments across the state to raise taxes on a number of products and services that would have an immediate negative impact on citizens – including a 10 percent hospitality tax on alcohol.
Amy Christie, Executive Director of the Pennsylvania Tavern Association, blasted the tax proposal as an attack on Pennsylvania citizens and businesses that are struggling to survive. “While we understand that local cities may feel the need to acquire more funds, we would encourage the PLCM to work with their retail licensees instead of blindly taxing them,” said Christie. “Our members already provide a great amount of charitable community services where they live and work, and this tax will take away from the contributions and support we provide to programs like youth recreational leagues, food for the homeless, constant support to high school sports teams, and so much more. Additionally, our members go the extra mile to educate employees with the RAMP program – a proven and effective tool in preventing any alcohol related safety issues.”
A recent economic review found that Pennsylvania restaurant patrons already pay 5 different direct taxes and fees with each purchase, including: Federal Excise Tax ($13.50/proof gallon), the Johnstown Flood Tax (18%), Bottle Handling Fee ($1.20/bottle) State Sales Tax (6%), and Local Sales Tax (up to 2%). The analysis showed that 61% of the purchase price of a typical bottle of spirits in Pennsylvania already goes to taxes – a rate which is already among the highest in the region, according to the Distilled Spirits Council, a national trade association which represents over 5,000 brands sold in Pennsylvania.
“At a time when restaurant patrons are worrying about their wallets, and small businesses are deciding between raising prices or laying off bartenders and busboys, this guaranteed tax increase would make life that much harder for a lot of people,” said David Wojnar, Vice President of the Distilled Spirits Council.
“Even New York has a lower tax burden on spirits,” Wojnar said, noting that the current implied excise tax rate on spirits in Pennsylvania ($6.55/gallon) is ranked second among all six states that border it: New York ($6.44); New Jersey ($4.40); Delaware ($3.75); West Virginia ($1.70); and Maryland ($4.45). “We’ve experienced the negative impact the Allegheny County Drink Tax had on the hospitality industry in that region, and it would be a disaster if such a tax were replicated throughout the state.”
“As we have seen in other states, local option drink taxes penalize local bars and taverns by creating an uneven playing field between municipalities,” said John Bodnovich, executive director of American Beverage Licensees which represents nearly 20,000 independent beverage retailers throughout the country. “This is to say nothing of the impact of generally increasing drink taxes on small businesspeople who already get by on razor-thin margins and employee local residents to wait tables and tend bar. It is bad policy to hamper small businesses with job-killing taxes in the face of 8.1 percent unemployment in Pennsylvania.”
Members of the coalition urged state legislators to seek policies that protect the hospitality businesses and workers – not punish them with narrow, highly-punitive tax hikes that hurt locally owned small businesses.
The membership of the Pennsylvania Hospitality Jobs Coalition includes:
- Pennsylvania Restaurant Association
- Pennsylvania Tavern Association
- American Beverage Licensees
- Distilled Spirits Council
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