Taxing Liquor during Mardi Gras

What do we do during Mardi Gras? We costume. We party. We drink. We visit with our friends. We listen to music. We drink. We parade. We catch beads and junk from floats. We eat. We drink. We drink a lot.

That’s the nature of the Mardi Gras beast. Alcohol rules in New Orleans, but it’s certainly King during Mardi Gras season.

For the hospitality industry, Mardi Gras is like a retailer’s Christmas. I don’t know what the exact figures are, but I would venture to guess that a huge proportion of a bar, restaurant, venue or club’s liquor sales are made during Mardi Gras weekend and just before.

The other evening I got an email from one of OffBeat’s regular advertisers (a music club) who sent a copy of a notice he received from one of his liquor wholesalers. It described a new, never-before-collected Occupational License Tax on businesses located in New Orleans that sell beverages of high alcoholic content. Retailers would be required to calculate, collect and remit additional taxes to the City of New Orleans for liquor, wines having an alcoholic content of 14 to 24 percent, and beer and wines having an alcoholic content of 6 to 14 percent. According to the notice, the ordinance apparently has existed on the city’s books since 1956 but has never been enforced when it was passed. The city council “intends to enforce it.” The notice urged all businesses who sell the impacted beverages to contact their councilperson to oppose the tax (five of the seven councilmember supported it).

Okay, this is a longwinded way of saying that the city council was meeting this Thursday to vote on passing the enforcement of this tax, mainly without the knowledge of most of the businesses that the tax would impact. Remember, this is the busiest time of year for any business in the city that serves alcohol (and by the way, bars, clubs, restaurants and venues are the businesses that also present live music for our consumption). What bar owner (especially a small business) is going to want to sit through a City Council meeting to oppose a tax s/he knows nothing about during the absolutely busiest time of the year? Not many, I can assure you.

We sent out a copy of the notice to a number of retail bar retail operators in New Orleans, who weren’t aware of the Thursday vote via the city council. One of them responded:

“It’s not the amount of the tax…it’s the AUDACITY of the tax…owners pay tax on booze when purchased, then they pay tax on booze when sold (city and state tax); now they have to pay for the amount sold. For a small business it could be a couple of hundred to a thousand a year, and for big business, it’s higher of course, but, the point is it’s sneaky and no one knows that it’s to be voted on this Thursday, February 23rd…when every bar and restaurant is focused on Mardi Gras. The problem is why a third tax? Imagine this: you pay tax when you buy cigarettes..and then you would have to pay a tax on how much you smoked, in addition to the tax you paid purchasing. I’m a small business owner and find it unfair and underhanded. If we the people let them railroad us with these out of nowhere sets the precedent for other crazy taxes..that you already many times can you tax the same thing? Just sayin’…

After this was sent out, we received an email from Gordon McLeod, the Chief of Staff from Councilmember Susan Guidry’s Office:  “A new City tax on high content alcoholic beverages that was put forth by the mayor’s office and sponsored by Cm. Guidry was passed by the City Council in October 2016. Cm. Guidry authored ordinance 31,764, which was introduced on February 9th, 2017 to clarify that the tax applied to ‘wholesale dealers.’  This ordinance does not create or promulgate a new tax. It was intended solely to clarify the existing ordinance. However, in response to concerns, the ordinance will be withdrawn from the council’s agenda on Thursday, February 23, in order to allow further discussion among interested parties, the administration and the Dept. of Revenue.

So, knowledge is definitely power in working with the politics of business. Personally, I think that every group, including the bars and clubs, need to organize a coalition to be more involved with political action and be a watchdog to prevent this kind of action by the city. It appeared from Mr. McLeod’s email that this tax is going to be imposed on the wholesalers, who then of course, would pass it on to the retailers, and most probably us, the consumers. Any way you cut it, trying to pass this ordinance during the busiest time of the year for the businesses it would most impact doesn’t seem like a very good idea to me. Just as musicians need to be vigilant when it comes to making sure they are not being locked down by permitting, onerous noise ordinances, so do the businesses that present the lion’s share of music. Clubs and bars, unite.

Take our Weekly Poll and get a chance to win tickets to local shows and lots more. Winners announced every week in the Weekly Beat.