Taxpayers are benefiting in cities that moved fastest to legalize Sunday retail sales of alcohol, but it’s a party that might not last.
Some of the biggest metro Atlanta cities that enacted the new rules in mid-November have since rung up thousands of dollars extra in taxes on beer, wine and liquor wholesalers, according to data analyzed by The Atlanta Journal-Constitution.
While any new income lessens the tax burden on homeowners, don’t count on Sunday booze revenue to build new sidewalks or add police and firefighters to the streets. The upticks in excise taxes — levied on businesses that sell drinks in bulk to restaurants and retailers — don’t amount to windfalls. A few cities have even seen revenue decrease.
While alcohol industry groups predicted long-range revenue increases, retailers and city finance managers aren’t so sure. Some say they are already seeing sales gains slowing down.
“The way I see it,” said Niko Patel, the owner of Niko’s Wine Corner in Snellville, “just because you have an extra day to buy, you’re not going to drink more.”
The outlook is significant as more communities make decisions on Sunday sales, including 11 doing so next month in metro Atlanta.
With religious opposition fading after Sunday sales won overwhelming approval in November referendums, its acceptance is expected to continue spreading. Those who say yes shouldn’t bank on a cash bonanza for city and county governments.
Metro Atlanta cities that have reaped rewards so far say it’s money most likely earned off neighboring cities and counties that weren’t so quick, and it will likely diminish once stores in unincorporated areas start selling seven days per week, too. Some store owners report that sales on Sundays detract from Saturdays, Mondays and Tuesdays.
“I think you’ll see it level out over time,” said Sandy Springs Revenue Supervisor Brandon Branham, whose city saw a 7.6 percent increase in January excise taxes, amounting to about $8,200 toward a $75.9 million budget.
Meanwhile, neighboring Atlanta, which started Sunday sales more than a month later, saw January wholesaler tax collections at a four-year low, according to unaudited figures.
“Once the other cities get it established,” Branham said, “then you won’t have people coming over from other jurisdictions.”
Sandy Springs Councilman Gabriel Sterling, who pushed for a November referendum as well as a start date immediately after election results were certified, said the push was never about raising revenue.
“This was about letting our people do what they want, when they want, with a legal product,” he said.
Woodstock, with a $6.5 million budget, saw a 19.5 percent increase in excise taxes, an extra $9,000 compared with January 2011.
“We’re rich!” City Manager Jeff Moon said jokingly.
The city got a head start on unincorporated Cherokee County, and Moon said revenue should drop off further if Cobb County approves Sunday sales in March. The city may end up with enough new revenue to hire another police officer, he said, but time will tell.
Retailers say profits went up in the first few weeks, but they tapered off as more communities came on line in December and January. Patel said what started as an increase of 2 percent to 3 percent has gone down to 1 percent to 2 percent.
Patel said he’s still pulling in customers from unincorporated DeKalb and Gwinnett counties, but that may only last a few more months.
Shardul Patel — no relation — general manager of the Roswell Package Store in Sandy Springs, said he had six good weekends before Atlanta started. A profit increase of 20 percent is now about 5 percent to 10 percent, although he’s still getting customers from Cumming and Vinings.
The leaps in profits they report are reflected in several cities’ excise tax collections — the best way to make a short-term measurement of increases in alcohol sales within a jurisdiction. (Sales taxes go to the state Revenue Department, which only tracks collections by county.)
Industry experts say there’s typically a 30- to 45-day lag between counter sales and wholesalers replenishing stock and paying local taxes, which makes January figures indicative of December sales.
Comparing January wholesale tax collections to those a year ago, several cities that started Sunday sales on Nov. 20 have come out winners. In others, it’s been business as usual.
• Duluth had January collections of $64,024, a 19.5 percent increase from January 2011 that added nearly $10,500 in city revenue.
• Snellville’s collections went up by $2,800, a 9.1 percent increase.
• Alpharetta saw a 1.5 percent increase, or $1,200.
• Union City had a 12.2 percent decrease, from $31,645 to $27,789.
Jay Hibbard, vice president of government relations for the Distilled Spirits Council of the United States, said that overall those are positive results. Counting on more impulse buys, his organization predicts Sunday sales will increase statewide liquor taxes by 5 percent to 7 percent, translating to an additional $3.4 million to $4.8 million.
That’s going to take at least a year to measure, though, after the majority of the state adopts Sunday sales, Hibbard said.
Carolyn Pessin, among the 65 percent of Snellville’s voters who approved Sunday sales, said enriching local government wasn’t her motive.
“It was just a matter of convenience,” she said. “I like choices.”
But Marietta resident Renee Ford Clark said uncertainties over whether taxpayers or businesses will benefit makes her even more resolved to vote no in March.
“Some things are more important than money,” she said. “Some things need to be reserved for the Sabbath.”
Profits went up, then tapered off
Most metro Atlanta cities that started Sunday package sales Nov. 20 have seen increases in taxes collected in January. Industry officials say that January figures are the best indicator of December sales.
* All January taxes aren’t in, but very little is pending
** All January taxes may not be in
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