Nightlife Venues Urge D.C. Council Bill Sponsors to Withdraw Newly Proposed Beverage Excise Tax

From: D.C. Nightlife Council, March 30, 2021

WASHINGTON, DC – The D.C. Nightlife Council (DCNC) today called on D.C. Council members Brianne Nadeau and Mary Cheh to withdraw their renewed co-introduction of a proposed bill to impose an excise tax on a wide range of ‘sweetened beverages’ sold in the District. The legislation, now titled the “Nutrition Equity Amendment Act,” is a repeat bill similar to one last proposed in 2019 that did not advance to consideration.

“This second attempt to impose a special tax on some beverages is merely a hunt for new spending revenues and not the purported health measure that the sponsors claim,” said D.C. Nightlife Council coordinator Mark Lee, currently furloughed as a result of the pandemic’s devastating economic effect on local nightlife venue member businesses. “The very last thing elected officials should be doing is burdening local small businesses and resident consumers with additional taxes during this incredibly challenging pandemic period when both our city’s local community enterprise and lower-income residents are struggling to financially survive.”

The bill, if approved, would create a new excise tax of 1.5-cents-per-ounce on ‘sweetened beverages’ and add a substantial additional price to both retail product sales and mixed-drinks served at alcohol-licensed bars, restaurants, nightclubs, and entertainment venues. “Neighborhood nightlife venues are literally fighting to financially survive and any significant new cost to primary product revenue sources is an absolute economic threat,” Lee added. “When the District has a more-than-half-a-billion-dollar revenue surplus and anticipates receiving approximately $2.4 billion in additional federal assistance it’s no time to be talking new taxes.”

The proposed excise tax would add approximately $57.60 to the cost of each beverage ‘syrup box’ of mixers used in drinks and cocktails sold at bars, restaurants, nightclubs, and entertainment venues. This tax would notably not apply to sweetened coffee drinks, benefiting large corporate chains while burdening the District’s 96% hometown independent nightlife venues, as well as corner stores, grocers, and other local businesses.

In the tiny number of less-than-a-handful of cities that have imposed this type of special product tax, there is no-or-very-mixed evidence regarding a desired effect on consumer beverage choices, most often only shifting purchases to nearby jurisdictions. D.C. Council member Nadeau, the primary proponent of the tax, stated in a news release late yesterday announcing the tax proposal reintroduction that, “Excise taxes on sugary drinks are more likely to encourage a customer to make a healthy beverage decision because the increased price in the sugary drink appears at the shelf not at the register.” The tax cost at nightlife venues, however, would not meet such criteria due to adding only a ‘hidden cost’ for the business that would be invisible to the purchaser.

DCNC, an association representing bars, restaurants, nightclubs, and entertainment venues, has joined a large and broad-based coalition of D.C. business groups, community faith leaders, and more than 400 local small businesses and neighborhood retailers in opposing the bill. In addition to D.C. Nightlife Council, associations partnering with the Alliance for an Affordable DC to oppose the bill include the Restaurant Association Metropolitan Washington, Hotel Association of Washington DC, DC Chamber of Commerce, Hispanic Leadership Fund, DC Association of Beverage Alcohol Wholesalers, International Brotherhood of Teamsters Local 730, MD-DE-DC Beverage Association, Mid-Atlantic National Association of Theatre Owners, FMI–Food Industry Association, National Association of Concessionaires, National Automatic Merchandising Association, and grocers Yes! Organic Market, Harris Teeter, and Safeway Eastern Division.

The proposed bill is co-sponsored by DC Council chair Phil Mendelson and DC Council members Charles Allen, Anita Bonds, and Elissa Silverman. Committee assignment and a public hearing date are currently pending.

D.C. Nightlife Council (DCNC) is a nonprofit trade association and 501(c)6 business membership organization representing and promoting hometown independent small-business bar, restaurant, nightclub, and entertainment venues contributing to a vibrant community nightlife and dynamic nighttime economy – continuing a legacy of advocacy spanning more than two decades.