A new tax on alcohol that was proposed in Chicago’s City Council could have big implications for both shoppers and retailers, opponents of the proposal warned Monday.
The new tax proposal came as Chicago faces a crucial budget deadline, with no signs of a deal in place.
The 2026 budget plan needs to be approved by the mayor and at least 26 of the 50 alders by the end of the year. Chicago Mayor Brandon Johnson’s budget plan includes a $33 per employee corporate head tax on the city’s largest companies each month, plus a host of other taxes. The mayor’s revenue ideas have been soundly rejected by the council’s Finance Committee.
Alders began crafting their own plan, and 26 of them signed a letter presenting an alternative proposal. The alternate plan took out the corporate head tax, replacing it instead with an increased tax at liquor stores and other measures.
The group’s number has since risen to 27 as they prepare to propose yet another version of their plan Tuesday. It was not clear if the liquor tax would remain on that proposal, but opponents spoke out loudly Monday.
The 3 percent liquor tax increase would apply to off-premise sales. That could bring city sales taxes on off-premise beer, wine and spirits to 13.25 percent – on top of other state, federal and local taxes.
“It will punish all Chicago retailers, not balance the budget,” said Pat Doerr, the director of the Hospitality Business Association of Chicago, at a press conference staged at the Mousetrap Taproom. “It will drive people even more across the suburbs for a lower sales tax.”
Many of the business owners gathered at the press conference said they were frustrated about the timing of the proposed increase.
“We are struggling because tariffs have already affected our business,” said Mike Moreno, who owns the liquor business his family started in Little Village back in 1977. “We are struggling because ICE raids have affected the Little Village neighborhood drastically. We are struggling because inflation is at all-time high.”
Michelle Foik is the co-owner of the Eris Brewery and Cider House in the Ravenswood neighborhood. She said the profits from her off-premise sales are helping support her restaurant and the jobs it offers.
“We won’t make what we need to happen if you keep taking away things from us by increasing taxes on the people we rely on: our consumers…our guests,” she said.
The Coval Distillery was one of the first to open in the city since the mid-1800’s. Owner Dr. Sonant Birneker Hart said any increase in the Chicago liquor tax will reduce her sales and hurt her bottom line.
“This doesn’t just affect my business,” she said. “Like every other local business, every dollar is about two to two and a half dollars going into the local economy.”
Doerr said he is disappointed no one from the city has reached out to him about the concerns of his membership.
“Whoever is negotiating this thing please call me,” he said. “We have been in play for a month and I don’t know who has been negotiating at City Council.”
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