What One City's Liquor Tax Collections Says About The Cost Of Pandemic Lockdown Restrictions

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Posted: Oct 01, 2021 10:32 AM
What One City's Liquor Tax Collections Says About The Cost Of Pandemic Lockdown Restrictions

Source: AP Photo/Ted S. Warren

Lockdown restrictions played a major role in determining where Americans could eat in 2020 and early 2021. And drink, for that matter!

We have some unique data to illustrate that latter point. The city of Philadelphia imposes a special liquor tax of 10% on the sale price of alcohol-containing beverages within the city. The tax does not apply to sales made by liquor stores and beer distributors, but does apply to the sales of beverages containing alcohol at public venues, such as bars, hotels, restaurants, and clubs.

During the coronavirus pandemic, most of these venues within Philadelphia were closed or forced to operate at severe capacity limits starting in March 2020. After being allowed to reopen or to expand their operations in the following months, many still were prohibited from providing bar service or serving drinks without food until April 2021.

These restrictions mean that Philadelphia's liquor tax collections provide a direct picture of how pandemic lockdown restrictions affected the ability of consumers to buy alcohol while dining away from home. The following chart shows the trailing twelve month total of Philadelphia's liquor tax collections from June 2015 through June 2021, covering the city's last six fiscal years.


Philadelphia's trailing twelve month liquor tax collections plunged by 67.5% from February 2020 through March 2021 due to local coronavirus pandemic lockdown restrictions, from $83,734,909 to $27,150,414. With the city's 10% liquor tax, that $56.6 million decline in tax collections indicates a $566 million reduction in the sale of alcohol containing beverages at Philadelphia's public dining venues.

And that's just one city within the United States. How big do you think that number would get if we had the data for all of them?

Reference

City of Philadelphia Department of Revenue. School District Monthly Revenue Collections, Fiscal Years 2015, 2016, 2017, 2018, 2019, 2020, 2021 [PDF Documents]. Accessed 24 September 2021.