Taverns hiccup on county's drink tax rollback

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Allegheny County's drink tax dropped with the new year, but that doesn't mean customers are seeing lower bar tabs.

Many of the tavern owners who loudly complained about the 10 percent tax a year ago are quietly keeping their prices the same, despite the tax having been lowered to 7 percent.

Kevin Joyce, owner of The Carlton on Grant Street, Downtown, and past chairman of the Pennsylvania Restaurant Association, was quick to their defense.

"A good case could be made for bar owners hanging on," said Mr. Joyce, leader of a group called Friends Against Counterproductive Taxation. "There's never been a tougher year than 2008 for the hospitality industry. From the drink tax, to the increased costs, then demand decreased, and then in the fourth quarter, the economy crashed and people weren't spending as much disposable income."

A year ago, when the 10 percent drink tax went into effect, many restaurant and tavern owners made a point of putting the "Onorato drink tax" on receipts to show customers where the money -- and the blame -- was going.

It turns out that such finger-pointing is making life simpler -- and a bit cheaper -- with the tax having dropped as of Jan. 1.

"Our prices went down the minute the tax went down," Mr. Joyce said. "In the restaurant environment, the tax is on the check. The consumer gets an immediate benefit. But in the bar environment, there's usually not a guest check, and everything's rounded to a certain price."

A random survey of Pittsburgh bars failed to find any that had reduced the prices that had been rounded up a year ago.

"We included the tax in the sale price last year, so we rounded off to the nearest quarter," said Keith Sheppard, manager of The Saloon of Mt. Lebanon on Washington Road. "When we're busy, we don't want to deal with pennies."

And they haven't reconfigured the prices to reflect the 7 percent tax.

"No one's even mentioned it," Mr. Sheppard said.

Angela Rebeiro, manager at One 10 Bar & Grill on Smithfield Street, Downtown, said the bar's accountant had recommended against recalculating the cash registers and the drink prices have remained the same. The popular $2.25 draft beer still costs customers $2.25.

Zamir Zahavi reopened the Park House on the North Side two weeks ago after having been closed for half of 2008. He took the trouble of breaking the tax out separately on his guest checks a year ago, so his customers are seeing lower prices -- be they just a matter of nickels and pennies. The price of a glass of Southern Comfort is $4.50, just as it was last year. But with a 10 percent tax, it cost the customer $4.95. Now, it's $4.81.

"I want everyone to know that they're paying for the tax," he said. "I think that's a mistake a lot of bar owners made. They incorporated the tax into the price of the drink, and now they're having to recalculate it."

County Treasurer John Weinstein said customers who see receipts reflecting a 10 percent drink tax can complain to his department, which will make sure that only 7 percent is being collected. "We're going to be tracking all this and making sure the bars are complying and not charging more than the 7 percent tax," Mr. Weinstein said. "They may still charge more for their drinks -- we don't have any jurisdiction over that -- but they can't charge more than the 7 percent tax."

Karen Greiner, a customer at Hal's on Babcock Road in the North Hills, was enjoying a drink called an Irish car bomb last night. The cost was $7, but the tax was separate, so the drink cost her less than it would have two weeks ago.

"I'm glad, but we still have a drink tax," she said. "We've got higher turnpike rates. Everything is taxed. What else could they tax? When do we get a break?"

Dan Majors can be reached at dmajors@post-gazette.com or 412-263-1456.


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