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Pa. group lodges legal challenge to county drink tax

PITTSBURGH The prospect of charging 10 percent more for alcoholic drinks as of Jan. 1 has galvanized restaurants and other opponents of the Allegheny County tax, with one legal challenge filed Thursday and another reportedly planned.

Meanwhile, two state lawmakers are said to be drafting legislation that would cut the wholesale costs of liquor throughout the state and thereby offset the tax’s impact on restaurants and taverns here and elsewhere in Allegheny County. According to local news reports, the state senators want to increase the state liquor authority’s standard discount for establishments that are licensed to serve alcoholic beverages, to 16 percent from the current 10 percent. The Pennsylvania Liquor Control Board controls the distribution of alcoholic beverages throughout the state.

Restaurateurs bitterly opposed the plan to pay for transportation enhancements by levying the 10-percent drink tax. Despite their opposition, the measure was approved by the County Council on Dec. 4 and signed into law by county chief executive Dan Onorato on Dec. 10. It goes into effect at 6 a.m. on Jan. 1.

The industry fears that the sharp increase in what consumers pay for alcoholic beverages will drive down sales. They also say the processes for levying, collecting and passing along the tax have not been clarified, and that they have not been given enough time to adjust their cash registers and procedures.

On Thursday, two local restaurant companies joined with a coalition called Friends Against Counterproductive Taxation in petitioning Common Pleas judge W. Terrence O’Brien to halt enactment of the tax before Tuesday. A report in the Pittsburgh Tribune-Review said O’Brien has already heard arguments in favor of suspending enactment and is expected to issue his decision today.

The plaintiffs alleged in part that not enough time was provided to reprogram their point-of-sale systems to assess the tax.

The Associated Press reported Saturday that the Pennsylvania Restaurant Association planned to seek an injunction this week to halt enactment of the measure.

“This is not over by a long shot," PRA chairman and Pittsburgh restaurateur Kevin Joyce was quoted as saying.

However, representatives of the PRA told Nation’s Restaurant News that the group is not considering legal action.

More than 2,200 restaurants and bars would be affected by the law, according to local news reports.

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