The beverage tax that everyone thought was down for the count rebounded at half the assessment, 2 cents instead of 4, but with long reaching effects for Baltimore City residents and businesses. Soda, water, beer and other alcoholic drinks are taxable, while milk, juice and 2-liter containers are exempt.
That part is clear, but the next step awaits explanation.
The tax becomes effective with July 24 beverage deliveries. According to the official city Web site, distributors are responsible for seeing that the taxes exacted from their retail customers are paid to the city coffers. The site further instructs retailers to require the appropriate certification from their distributors, because retailers are liable if those taxes aren’t paid.
Initial contact with a few retailers revealed many of them either didn’t know how they would be affected by the tax or were noncommittal about the whole thing.
“I think someone from the city is coming to talk to us this week,” said Kevin Brown, owner of Station North Arts Café, located on the 1800 block of North Charles St. “We actually serve between 75-100 drinks per day so we’re definitely affected.” Brown said they make their own purchases at the wholesalers rather than having a regular delivery to his establishment that serves an average of 130 customers per day.
New Haven Lounge owner, Steve Covington, sees the new tax as a “necessary evil” and is happy to help in providing support for schools, jobs and whatever other services are preserved through the additional revenue. “Personally, we’ll probably absorb the additional cost and not pass it on to our customers,” Covington said.
But he finds the process somewhat confusing. “I haven’t received information as to how it all works, but how can the retailers be responsible if the distributors don’t pay?”
Covington said he’s confident, however, it will all be worked out and he’s sure it won’t in any way hurt business at the New Haven in Northwood Shopping Center.
Although the expected income is only half the originally desired $11 million, there’s no doubt many city employees are grateful for the dollars that promise to save jobs and preserve much needed services.
With the June 24 passage of the highly debated beverage tax, Mayor Stephanie Rawlings Blake thanked the Council for “approving almost all of my Comprehensive Plan to fix the worst budget crisis in the City’s modern history with more than $70 million in tough spending cuts and $42.9 million in new revenue.” Her statement said the plan would fully fund the city’s “obligation to public schools, maintain every single police officer, reduce firehouse closures, and keep all community libraries open all without raising property taxes.”
Consumers will not be taxed on beverage purchases but in most cases will see an increase in the prices.