Plan to suspend sales taxes at bars and restaurants this summer would cost state but save consumers $170 million

MADISON – The Assembly approved a bill Tuesday that would eliminate the sales tax this summer at bars and restaurants — saving consumers more than $170 million and tightening the state’s finances.

Assembly Bill 242 passed 62-32, with seven Democrats joining all Republicans to support it. 

“People — taxpayers — like this,” said Republican Rep. Patrick Snyder of Schofield. 

The measure is meant to help industries that were hard hit during the COVID-19 pandemic. It would suspend the sales tax from June 1 to Aug. 31 at movie theaters, taverns, restaurants, brewpubs, amusement parks and arcades.

It would cause the state to forgo $160 million and counties to lose out on $12.6 million in revenue this summer, according to the nonpartisan Legislative Fiscal Bureau.

Those figures gave opponents pause. While consumers might save a dollar or so on a $20 round of drinks, counties would lose funds that could hurt their operations, they said. 

Democratic Rep. Evan Goyke of Milwaukee said he thought there were better ways to help such businesses, such as by giving them payments using federal funds the state is receiving to deal with COVID’s economic effects. 

Goyke said people will visit restaurants and bars this summer if it’s safe. He’s skeptical that eliminating the sales tax would drive up any additional business for them.

“It’s going to be a banner summer if it’s safe,” he said. 

The sales tax is 5.5% in most parts of the state, with 5% going to the state and 0.5% going to counties. Some areas, such as tourist hotspots like Wisconsin Dells, charge higher sales taxes. 

Joining Republicans in supporting the bill were Democratic Reps. Deb Andraca of Whitefish Bay, Samba Baldeh of Madison, Steve Doyle of Onalaska, Francesca Hong of Madison, Sara Rodriguez of Brookfield, Lisa Subeck of Madison and Robyn Vining of Wauwatosa.

The bill goes to the Senate, which is controlled by Republicans. Its fate there is unclear. 

Democratic Gov. Tony Evers hasn’t said if he would sign or veto the bill if it gets to him.

Contact Patrick Marley at patrick.marley@jrn.com. Follow him on Twitter at @patrickdmarley.