Business owners worry new alcohol tax will cost customers

The Fulton City Commission passed a new 5 percent tax on all alcohol sold in the city, whether by the glass or by the package. The city is trying to recoup a $160,000 deficit.

Since Parkway Regional Hospital closed in March, the 2 percent payroll tax takeaway for the city is much less. City leaders say they need to figure some way to make up that deficit, but business owners tell me the tax could carry greater consequences.

Hoyt Moore says his customers drive for miles to come to the Keg. Moore begins the barbecue fire at dawn, but he says his customers drive out because of the booze. Moore says the low prices are one of the biggest draws when compared to his Tennessee competition across the border.  But now Moore says they’ll probably lose customers with the new tax.

“Why are they going to drive 50 miles when you can get it for the same price at home?” Moore says.
Beer, wine and alcohol are all taxed differently, but with the 5 percent tax a $5 drink will cost an extra quarter, in addition to the 6 percent state sales tax.

Fulton City Manager Cubb Stokes says the new tax was one of the few options to keep the city running. He says he realizes no one likes taxes, but he also has to consider the rising cost of living. Stokes says the city will monitor the tax for a year and decide if it wants to keep it, but the city’s services would be at risk without the tax.

“It’s not a pleasant decision to make, but it’s an alternative that was available to us,” Stokes says.

The tax will begin July 1. The revenue from the tax will go to the city’s general fund, but will be earmarked for the police department. 

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