Despite high tax, city brings in high revenue from liquor sales

Paige Leskin, City Editor

Although Evanston’s liquor tax is higher than those of surrounding communities, establishments continue to request licenses from the city.

Compared to four similar Illinois suburbs, Evanston has distributed the most liquor licenses in total and has the highest number of licenses per acre of land, according to a presentation to the city’s Administration and Public Works Committee on Monday.

As of Monday, 110 establishments in the city are licensed to sell liquor, which equates to about 677 Evanston residents per license.

“What you’ll find often in communities is they’ll tax something that has a potentially detrimental impact on a community, and that money then can be used to offset different things,” said Johanna Nyden, the city’s economic development division manager, who presented the liquor tax and license numbers.

Evanston’s tax rate on liquor is 6 percent. The rate was established when the temperance movement was highly active in the city during the late 1800s, Nyden said. In the 2014 fiscal year, the tax generated nearly $2.5 million.

The tax, which requires purchasers to pay for “the privilege of purchasing alcoholic liquor,” is higher than the rate in many surrounding Illinois suburbs, including Park Ridge, Aurora, Elgin, St. Charles and Oak Park, according to the presentation.

The city’s liquor licenses are divided between sites that can provide for on-premise and off-premise consumption. For the past two fiscal years, more than half of the tax collected has come from the 18 different off-premise consumption sites in the city.

“Our on-premise consumption is crazy high because we have a ton of restaurants,” Nyden said. “People make decisions to dine out and (the restaurants) will mark up on a glass of wine or mark up on a bottle of wine or beer and people will pay it.”

The Northwestern community has not played a significant role in restaurants and other places trying to acquire licenses, Nyden said. Instead, Evanston has experienced a shift in its culinary dining experience, with many unexpected places applying for licenses, including Starbucks and Panera Bread, she said.

The liquor tax has failed to deter businesses from asking for licenses because they want to stay competitive and successful, Nyden said.

“People come in and they know they need to serve beer or wine or liquor to their customers because the guy next to them does,” she said.

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