News & Information
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| For Immediate Release |
Contact: Andy Deloney |
| September 16, 2005 |
517/377-3931 |
Michigan restaurant sales taxes dip again in 2nd quarter
2 percent drop results in third straight quarter of lower revenues
LANSING, MI – The Michigan Restaurant Association (MRA) announced today that, in the second quarter of 2005, sales taxes collected from Michigan restaurants dipped more than two percent from the second quarter of 2004. This marks three straight quarters in which revenues produced in a quarter were lower than in the previous year. In the months of April, May and June 2005, restaurants collected and paid over $148 million, compared to over $151 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 modest 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 more than 31 percent from a year ago. This is the second quarter in a row where bars and taverns have produced significantly less compared to the same period in 2004. In the first quarter of 2005, these two categories produced sales tax revenues that were 32 percent lower than the first quarter of 2004. Where this sector produced over $26 million in the second quarter of 2004, it produced just over $18 million in the same period of this year.
The last quarter in which the industry produced an increase in sales tax revenues was the third quarter of 2004, when Michigan’s restaurants collected six percent more sales tax revenues compared to the same period in the previous year.
Other sectors in the food and beverage service industry produced increases. The full-service restaurant category saw its sales tax revenues increase a modest 2.9 percent, producing more than $70 million. The hotel dining category increased its sales tax revenues 4.4 percent, producing over $248,000. The category that includes quick service restaurants and pizzerias saw a 4.6 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 2ndQuarter |
2004 2ndQuarter |
Change (%) |
|
|
|
|
| Class C Tavern, with Liquor, Food Incidental |
$15,920,976 |
$24,193,003 |
-34.2 |
| Tavern, Beer & Wine, Food Incidental |
$2,254,737 |
$2,025,857 |
11.3 |
| Night Clubs, Cabarets, Discothques |
$734,274 |
$671,255 |
9.4 |
| Hotel Dining Rooms |
$248,727 |
$238,267 |
4.4 |
| Family Restaurants & Cafeterias |
$70,404,196 |
$68,453,179 |
2.9 |
| Lunch Counters, Dairy Bars, Fast Food |
$52,179,624 |
$49,866,845 |
4.6 |
| Caterers, Concessions, Food Vending Machines |
$6,435,617 |
$6,148,810 |
4.7 |
|
|
|
|
| Total |
$148,178,151 |
$151,597,215 |
-2.3 |
Source: Office of Revenue and Tax Analysis, Michigan Department of Treasury
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. For more information, call (517) 482-5244.
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