Newark City Council rejected a proposed tax on retail alcohol sales at its Council meeting Monday.
Newark City Council tasked city staff to find new revenue sources. City Manager Tom Coleman’s latest proposal was to levy a tax of up to 3% on retail alcohol sales. The proposal would have applied to stores selling alcohol, not restaurants or bars.
Coleman’s estimates projected between $150 and 300 thousand of revenue if the tax were approved by Council and the General Assembly. Before state consideration, Coleman needed three-quarters of Council to vote in favor, which amounts to six out of seven Councilmembers.
And because one Councilmember was absent, Coleman needed a unanimous vote.
The motion failed 3-3. Councilmember Jason Lawhorn voted against and said it’s a creative approach but might be difficult to enforce.
“Do we know how we're going to track it?” Lawhorn asked. “You know, how's it going to be reported out from the liquor store? Have we figured that piece out? Do they have the capability to know if they're selling pretzels versus a bottle of wine?”
Coleman said city staff would need to figure out how to track the tax. Coleman previously pitched a lodging tax increase.
“Part of the reason why we pushed to put this on tonight's agenda, even though we didn't have a full seven, was the clock is ticking,” Coleman explained. “We have until the end of June, and since this is just authorizing legislation – it's not implementation – Council has time to wait if we can get the authority to do it, to work out the details.”
Any time a municipality wants to make changes to its charter, the General Assembly has to give its stamp of approval.
Several Councilmembers voiced concerns the measure wouldn’t win support in Dover. The decision sent Coleman back to the drawing board to find other potential revenue sources.
