Evanston's Liquor Tax-16.5%?

A few weeks ago we had dinner at Pete Millers. We were with a couple who don't drink and my husband asked to have our bottle of wine put on a separate check. When we got the check, the tax on the 50.00 bottle of wine was 8.25. My husband asked the bartender if that was correct and he said that Evanston recently passed a new liquor tax of 16.5%. So now my husband won't eat at any Evanston restaurants because he is pissed off. Is this really true? I tried to google Evanston Liquor Tax, Liquor Laws etc. and couldn't find anything to back this up. He's stubborn that way.

that tax rate is ridiculous imho.

I rarely get up to Evanston to eat as it is, but a liquor tax like that would make me avoid eating anywhere there even more.

an article I spotted that mentions the tax

http://www.pioneerlocal.com/evanston/ne ... s1.article

jimswside wrote:that tax rate is ridiculous imho.

I rarely get up to Evanston to eat as it is, but a liquor tax like that would make me avoid eating anywhere there even more.

an article I spotted that mentions the tax

http://www.pioneerlocal.com/evanston/ne ... s1.article

You're googling skills are way better than mine!

My husband said the same thing that the owners of Va Pensiero said-that what Evanston is trying to do is run the restaurants out of town. How stupid.

Glad to know about this. Not saying it'd necessarily be a deal-killer for me but it's certainly the kind of information I'd want to have before going somewhere and ordering a bunch of liquor. Does anyone know if it applies to retail sales, too?

=R=

Some references I saw when googling this suggested that the rate a couple of years ago was around 14%. So it sounds like it's going up, but it's not a sudden 16% increase.

Wasn't Evanston a dry town for a long time? Home of the WCTU, right? Doesn't surprise me that they have no qualms about hefty "sin" taxes.

It is true. I always recommend getting a drink or two at the bar in cash before ordering food and getting additional tax on top of the tax-included drink price.

Evanston just started charging $1.85 for a sticker to pick up a bag of lawn clippings. I guess they think weeds are a sin too.

The issue with Evanston and taxes is that Northwestern University, being a University, pays no property taxes. So, you have a huge piece of lakefront property in Evanston that generates virtually no revenue for the city. That's why almost everthing else in Evanston is taxed so highly. They have to make up the shortfall via other avenues. I realize that this is a very oversimplified description of the situation but having once lived in Evanston for a decade and still having many connections to the community, this seems to be its eternal, central issue.

=R=

There has always been an adversarial relationship between Evanston and the University. My husband went to undergraduate/graduate and law school there and both my daughters are graduates. It's never been a friendly relationship. However, as you may know Ronnie, the Evanston of 25 years ago is nothing like the Evanston of today. When we first moved there in 1978 I think it was still dry, and I know there were no liquor stores. And restaurants? Not very many.

What has always bothered me is that Northwestern has been good for Evanston and that a lot of the revitalization of the downtown area is due to the draw of the University-yet there is no love for the school. Although I have read that the current mayor has had many conversations and meetings with the President of the University - progress!

Is this a tax on the students? It seems a bit short sighted to me.

Diane wrote:There has always been an adversarial relationship between Evanston and the University. My husband went to undergraduate/graduate and law school there and both my daughters are graduates. It's never been a friendly relationship. However, as you may know Ronnie, the Evanston of 25 years ago is nothing like the Evanston of today. When we first moved there in 1978 I think it was still dry, and I know there were no liquor stores. And restaurants? Not very many.

That's true but a lot of what made Evanston truly special is gone now, too. This is partially a result of the big box stores being given huge financial incentives to open on the west edge of town. They've wiped out a lot of the small, family-owned businesses that were part of what gave Evanston its unique charm. Also, there are so many high-rises now. This too, is probably a function of trying to exact the maximum amount of revenue from each square foot of property, regardless of its effect on the overall quality of life for the community. One result of this is that traffic congestion in Evanston is brutal; even worse than it used to be. But who cares, as long as those towering condo buildings fill the coffers, right? It's a tough scenario and I don't know that there were any better solutions.

Diane wrote:What has always bothered me is that Northwestern has been good for Evanston and that a lot of the revitalization of the downtown area is due to the draw of the University-yet there is no love for the school. Although I have read that the current mayor has had many conversations and meetings with the President of the University - progress!

Probably a case of what doesn't directly affect the bottom line not being tangible enough to consider important (or actually measure, financially). Very sad, because I agree that the University greatly enhances the town's profile.

Diane wrote:Is this a tax on the students? It seems a bit short sighted to me.

I don't think so. I think it's just an ill-conceived attempt to make up an economic shortfall. In the long run, it may be more effective at scaring off business than at generating additional revenue. Maybe not, though. I'm definitely just thinking out loud.

=R=

ronnie_suburban wrote:The issue with Evanston and taxes is that Northwestern University, being a University, pays no property taxes.

That's a big part of it, but Evanston also has well over 100 churches and other places of worship that are off the tax rolls.

nr706 wrote:

ronnie_suburban wrote:The issue with Evanston and taxes is that Northwestern University, being a University, pays no property taxes.

That's a big part of it, but Evanston also has well over 100 churches and other places of worship that are off the tax rolls.

Man! Why don't they just call it Deadbeatston?

=R=

Hi- I have lived in Evanston since 1981, and when I moved here there were only three restaurants that you could purchase liquor at, and I belive the city was dry until about 1980, thanks to it being the national headquarters for the Woman's Christian Temperance Union. In the mid 80's they allowed one liquor store to open up. Now you can also buy liquor at Whole Foods, Dominick's and Jewel, and there are quite a few restaurants that sell liquor.

I've heard that 48% of the properties in Evanston are off the tax rolls. A big chunk of this is Northwestern, but Evanston also has two seminaries, lots of churches, and lots of nonprofits. When Vineyard Church bought some commercial property at Green Bay and Ridge, they were told that they could not hold church services there, because if they did they would be exempt from paying taxes. I think when they bought the property, they were hoping that they could get the city to change their mind. They finally sold the property a few years ago, and relocated their church to the old Shure factory location at McCormick and Howard, where they now hold church services.

The city has been trying to get Northwestern to cough up some money forever, and the University responds that they are good for the city, and offer a lot of culture that we would not have otherwise.

I pay a ridiculous amount of money on property taxes for my condo, but there is no way around it unless Northwestern agrees to give the city some money. When they bought an office building at the edge of downtown Evanston a few years ago, they did agree to make a one time payment of something like $130,000 to the city.

As noted, Northwestern has prime lakefront property that they pay no taxes on, and they own a lot of historical houses on Sheridan Road, that I am sure are worth at least a million dollars a piece. These homes are mostly occupied by departments of the university. The University wants to tear many of these houses down, and replace them with classrooms, but the city will not allow them to do that, because the homes are historical. Hope this helps, Nancy

I'm having trouble seeing what's uniquely disadvantageous to Evanston about having a tax-exempt university within its borders. There are thousands of college towns in the US that are in the same situation.

Look at Champaign and Urbana - the university straddles both and contributes taxes to neither, but Champaign has other sources of tax revenue (chiefly, Carle Hospital, the Kraft factory, and the Marketplace shopping area north of town). When I owned a house there there we actually got property tax rebates. And business attracts business - Champaign has grown enormously in home sales, businesses, and tax revenues in the last 20 years.

Urbana, meanwhile, for whatever reason, couldn't even keep a K-Mart in town, and thus struggles to survive on considerably higher property taxes and sales taxes and a constant mournful plea to residents to shop local. Not the kind of thing that makes an outsider want to shop there or buy a house there or go to a restaurant there.

That's true but a lot of what made Evanston truly special is gone now, too. This is partially a result of the big box stores being given huge financial incentives to open on the west edge of town. They've wiped out a lot of the small, family-owned businesses that were part of what gave Evanston its unique charm.

You can have "truly special" and "unique charm" but unless you have a strong tax base, for example from some big businesses being encouraged to build on the west edge of town, someone else is going to have to pay for those, and it's probably going to be the shoppers and the property owners and the restaurant diners.

As Nancy said, for historical reasons Evanston was dry for a long, long time. I interviewed for a job at NU in the early '80s and I remember the faculty members apologizing for it. Didn't bother me as I knew my way around the North Shore as a native, but it was a hindrance to them trying to entertain research sponsors and well-heeled alumni.

Another analogy - Highland Park and Highwood. The former was dry for decades. Look where the restaurants are: Highwood. Nothing to do with tax exemptions or preserving the special charm of Baskin-Robbins being the only thing open in downtown HP at night. Just a longstanding misguided policy that drove dining business elsewhere. Thank goodness that's over, but I doubt HP will ever catch up with Highwood as a dining destination. Evanston hamstrung itself.

I enjoy beating up on municipalities as much as the next guy, but does anyone have verification that this 16.5% tax in Evanston is accurate? I have my doubts.

Katie wrote:I'm having trouble seeing what's uniquely disadvantageous to Evanston about having a tax-exempt university within its borders. There are thousands of college towns in the US that are in the same situation.

Lakefront property on Chicago's north shore, where homes (which are taxed) are valued in the 7-8 figure range. Not too many universities share this situation. I believe that NU is the only major university which has its own private beach.

Kennyz wrote:I enjoy beating up on municipalities as much as the next guy, but does anyone have verification that this 16.5% tax in Evanston is accurate? I have my doubts.

C'mon. Are we really going to let the facts -- or lack thereof -- get in the way of a good debate?

=R=

If it makes you feel better, Kenny, I sent the URL of this thread to my alderman. I know this tax was recently raised, I recall that the Chamber of Commerce came to Council to protest - can't verify the actual amount of the tax but the OP sounds about right.

Evanston government is in an extremely difficult situation with income and out-go. They're trying anything they think will work at this point: unfortunately, sometimes this has consequences.

According to this document Northwestern paid $ 5,143,700 to the city of Evanston in fiscal year 2009. There is no property tax listed. The document also mentions that "the University purchased more than $13 million in goods and services from Evanston businesses."

Kennyz wrote:I enjoy beating up on municipalities as much as the next guy, but does anyone have verification that this 16.5% tax in Evanston is accurate? I have my doubts.

According to the Illinois Department of Revenue Tax Rate Finder:

Rates Local Government EVANSTON
County COOK
Location Code 016 0018 4
Liability Period 05 2010

Sales and related taxes
Sales Taxes (retailers' and service occupation taxes)
General merchandise 10.000%
Rate consists of the following:
State Rate 6.250%
County Home Rule 1.750%
Home Rule 1.000%
Regional Transportation Authority 1.000%

Qualifying food and drugs 2.250%
Rate consists of the following:
State Rate 1.000%
Regional Transportation Authority 1.250%


Home rule units may impose liquor taxes, which the Department of Revenue does not collect.

Edited to take out ronnie_suburban quote and to clarify link.

Food Nut wrote:

ronnie_suburban wrote:The issue with Evanston and taxes is that Northwestern University, being a University, pays no property taxes. =R=

According to this document Northwestern paid $ 5,143,700 to the city of Evanston in fiscal year 2009. The document also mentions that "the University purchased more than $13 million in goods and services from Evanston businesses."

I'm not sure why you quoted me here because according to the document (which is actually a PR publication from NU), not one penny of the $5.1 M was property taxes.

=R=

From what I can understand, Evanston's liquor tax is actually 6%, but combined with Cook County's sales tax of 10%, that brings the tax on booze to 16%.

Here is a link to Evanston's 2009 Liquor Tax form:

http://www.cityofevanston.org/departmen ... tement.pdf

d4v3 wrote:From what I can understand, Evanston's liquor tax is actually 6%, but combined with Cook County's sales tax of 10%, that brings the tax on booze to 16%.

Here is a link to Evanston's 2009 Liquor Tax form:

http://www.cityofevanston.org/departmen ... tement.pdf

That's very helpful. So, it looks like customers might pay a total of about 16%, but restaurants get 2% of that back. That leads me to the conclusion that this really is a behavior-influence tax. It's not just there for for revenue, but there to convince people not to drink so much. Why else charge the customer 6% only to let the business keep 2% of that?

Kennyz wrote:
That leads me to the conclusion that this really is a behavior-influence tax. It's not just there for for revenue, but there to convince people not to drink so much. Why else charge the customer 6% only to let the business keep 2% of that?

sounds like it, the nanny town at work i guess.

luckily I rarely(if ever now) schlep up to Evanston so they wont be getting my coin.

Well, what this tax tells me is to stay out of Evanston (where I have been dining for YEARS) and drink elsewhere. I know villages, states and the entire United States are hurting, but to be honest, all these taxes make me want to scream. I know the revenue has to come from somewhere, but if I have a choice, I (and the stubborn husband) choose not to go to Evanston. That's too bad because there are a lot of places I have enjoyed there in the past.

I will continue to eat at the Evanston restaurants that I like. An extra buck, or a couple of bucks, isn't really that big of a deal. If I wanted to save money, I'd stay home. And what is the tax rate in Chicago? Zero?

Darren72 wrote:I will continue to eat at the Evanston restaurants that I like. An extra buck, or a couple of bucks, isn't really that big of a deal. If I wanted to save money, I'd stay home. And what is the tax rate in Chicago? Zero?

Too funny.

One night when we were having dinner at L2O there was a table next to us that was convinced there was a mistake with their check. They told their server there was no way it could be as much as it was. The server pointed out that sales tax was 11.25% (regular Cook County sales tax plus the additional tax for being in the Navy Pier zone), and the patrons were utterly blown away. I'm pretty sure they were from the 'burbs.

There's another important principle here: taxes are not passed on dollar-for-dollar to consumers. Imagine that that the tax rate in in Evanston is 16 percent and the tax rate in Chicago is zero. Imagine two restaurants that sit just on either side of the Evanston-Chicago border. If the Chicago restaurant charged $100 for the exact same product that cost $116 in Evanston, some people (maybe most) would buy the product in Chicago. To attract business, the Evanston store would have to lower the price a little bit. In the extreme, they may find that they need to lower it to the same price as charged in Chicago. In this extreme case, the entire 16 percent tax would be paid by the business, not by the consumer.

This is a simplified example. In the real world there are a lot of complications - you can't always find the exact product just a few feet away, etc. But the lesson is the same: you don't just compare the tax rate; you compare the total cost. But even then things are not so simple because the price of a particular bottle of wine varies from restaurant to restaurant, even in the same city. Your bottle at Peter Miller's may have been expensive, but is that because of the tax, because Peter Miller's is expensive in general, etc.

Correct me if I'm wrong (yeah, as if I ever need to say that on LTH), but from various receipts lying around the house, I don't see any extra Evanston liquor taxes on retail purchases of booze - just the County tax. I'll admit that, last time I checked, a six-pack of Metropolitan Dynamo is $10.49 at Evanston 1st, vs. $9.99 at Binny's in the next town over, but I bet Binny's larger size and extra purchasing power may be a factor, and I'll pay the extra 50¢ for the convenience of not having to drive a bunch of miles into Skokie.

Hi- Ronnie is right. The $5.1 million that Northwestern claimed they paid the city last year, was for additional stuff like water and permits that all homeowners have to pay in addition to property taxes. Northwestern is always using this as propaganda. They own a ton of historical houses, on Sheridan Road, right across the street from the lake. The houses I am sure total well over $50 million, and they do not pay any property taxes on these. They also own some buildings that they rent out in Evanston, and pay no taxes on.

I forgot to mention that Evanston also has two hospitals that pay no taxes. I think that Champaign also has a hospital that pays no taxes?

I went to school at Michigan State, and when I went there, East Lansing had the second highest property tax rate in the state of Michigan. Most of the permanent residents there worked for the University, or for the state of Michigan in Lansing. There are no factories in East Lansing, as there are none or very few in Evanston.

How much is the liquor tax in Chicago? I bet it is not much less than it is in Evanston. Hope this helps, Nancy

I think that Champaign also has a hospital that pays no taxes?

Funny you should mention that, as a hospital in C-U (not sure which one ... Mercy, I think? or it used to be called Mercy when I was there... if I remember correctly...) is in the news lately for the State going after it for taxes because it did not do enough charity care (as a % of total treated) to qualify for tax-exempt status.

But we digress ...

NFriday wrote:When Vineyard Church bought some commercial property at Green Bay and Ridge, they were told that they could not hold church services there, because if they did they would be exempt from paying taxes. I think when they bought the property, they were hoping that they could get the city to change their mind. They finally sold the property a few years ago, and relocated their church to the old Shure factory location at McCormick and Howard, where they now hold church services.

I grew up in Evanston, and a childhood friend of mine is active in the Vineyard. The dispute with the City of Evanston was at least in part over zoning, not taxes per se:

http://articles.chicagotribune.com/1998 ... fellowship

http://www.freedomforum.org/templates/d ... entID=8327

http://www.cityofevanston.org/governmen ... ug17cc.pdf

And believe me, Evanston is a nanny government in many, many ways other than taxes on booze. I can't count the number of times I was kicked out of the park at night (though still during opening hours) as a teenager by the cops for the vicious crime of playing Hacky-Sack with my friends.