Opposition building against raising excise taxes on liquor, beer and wine

[May 15, 2021]  By Kevin Bessler

(The Center Square) – Opposition is growing to oppose raising excise taxes on liquor, wine and beer in Illinois.

The Coalition to Rebuild Illinois’ Hospitality Industry is supporting a bipartisan resolution to stop any tax hike, saying it would have a ripple effect throughout the state’s economy, dealing yet another blow to the restaurant and hospitality industry already reeling from the COVID-19 pandemic.

The coalition said the impact of the pandemic on the industry has been staggering. Illinois lost over 26,000 beer industry jobs and more than $1 billion in wages, and challenges facing the industry resulted in a $3 billion decrease in economic output statewide.

Sponsored by state Reps. Tom Demmer, R-Dixon, and Marcus Evans, Jr., D-Chicago, and with the support of 61 House members, HR 272 recognizes the hardships Illinois brewers, winemakers, distillers, distributors and retailers have faces during the pandemic, which resulted in record low sales, tens of thousands of layoffs and furloughs, and reduced activity for local communities. The legislation has been sent to the Revenue and Finance committee.

“Taxes already on these products are some of the highest in the country,” said Josh Sharp, CEO of the Illinois Fuel & Retail Association. “Illinois taxes beer, wine and liquor per gallon, so the taxes are already high and we don’t need more of them.”

Currently, Illinois taxes an additional $8.55 per gallon on liquor, $1.39 per gallon of wine, and 23 cents per gallon of beer.

A 2019 study from the nonpartison Tax Foundation found Illinois garnered the sixth highest amount per capita in excise taxes during fiscal year 2016, before the state legalized recreational cannabis. Excise taxes are a tax on a specific good or activity, and include “sin” taxes such as those on tobacco, alcohol, marijuana and gambling.
 

Sharp said another tax hike on liquor, beer and wine will just drive people over the border.

“Absolutely, just like we see with gasoline, like we see with cigarettes and a lot of other taxes that are here in Illinois that are already too high,” Sharp said.

According to at least one estimate, Illinois loses up to $30 million a year on cross-border alcohol sales, as people go to Missouri, Iowa, Wisconsin and Indiana for better deals.

“We applaud lawmakers for this bipartisan show of support to shield businesses hit hardest by the pandemic from increased taxes,” Sharp said. “This resolution provides a sense of security so businesses across Illinois can confidently reopen their doors, rehire workers and begin rebuilding.”