News & Information
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For Immediate Release |
Contact: Andy Deloney |
| June 6, 2005 |
517/377-3931 |
Michigan restaurant sales taxes dip in 1st quarter $136 million collected, 3 percent drop from a year ago
LANSING, MI – The Michigan Restaurant Association (MRA) announced today that, in the first quarter of 2005, sales taxes collected from restaurants dipped three percent from the first quarter of 2004. In the months of January, February and March 2005, restaurants collected and paid over $136 million, compared to over $140 million in the same months in 2004. This was due primarily to major decreases in sales tax revenues from bars and taverns, while other sectors, including full-service and quick-service restaurants, saw significant increases but couldn’t quite offset the loss.
The biggest change occurred in the bar and tavern with food incidental categories, where sales taxes plunged 32 percent from a year ago. Where this sector produced over $23 million in the first quarter of 2004, it produced just over $16 million in the first three months of this year. While this may sound dramatic, the reason is likely anything but dramatic. The Michigan Department of Treasury, which compiled the data, suspects the cause of the revenue drop is re-classification of businesses in one category into another, resulting in a smaller number of taxpayers and, subsequently, revenues in one category.
Other sectors produced considerable increases. The full-service restaurant category saw its sales tax revenues increase 4.4 percent, producing $67 million. The hotel dining category increased its sales tax revenues 8.5 percent, producing over $242,000. The category that includes quick service restaurants and pizzerias saw a 2.5 increase in its sales tax revenues. Overall, the increases could not completely offset the loss of revenues produced by bars and taverns.
| Type of Establishment |
2005 1st Quarter |
2004 1st Quarter |
| Class C Tavern, with Liquor, Food Incidental |
$14,766,242 |
$22,431,966 |
| Tavern, Beer & Wine, Food Incidental |
$1,385,354 |
$1,394,778 |
| Night Clubs, Cabarets, Discotheques |
$685,282 |
$653,180 |
| Hotel Dining Rooms |
$242,381 |
$223,344 |
| Family Restaurants & Cafeterias |
$67,531,173 |
$64,664,362 |
| Lunch Counters, Dairy Bars, Fast Food, Pizzerias |
$46,063,471 |
$44,93,296 |
| Caterers, Concessions, Food Vending Machines |
$5,497,585 |
$6,011,601 |
| Total |
$136,171,487 |
$140,316,527 |
Founded in 1921, the Michigan Restaurant Association represents more than 4,500 Michigan foodservice establishments. The foodservice industry plays an integral role in Michigan’s economy, employing more than 436,000 people and creating more than $11.3 billion in total annual sales.
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