Chicago - What is the deal with taxes in Chicago bars?

Was at Barleycorn saturday night on Clark (not my idea!). Ordered two beers from the bar and was told it was $12. Handed the bartender my credit card and told her to keep it open. Paid tab at end of night and saw that tax was added to the whole bill.

Why are they not charging me tax when I pay in cash? I could see a small bar not reporting it but Barleycorn is a huge establishment. No way they could get away with not reporting sales.

Now that I think about it, its always true. Whenever I pay cash the amount is always round and if there is a posted price for the drink its that price with no tax. Whenever I pay with card, the total is never round.

I had originally thought that for some reason alcohol prices in Chicago had tax included, but that does not seem to be the case.

They have to line the local alderman's pockets somehow! :)

Now that I think about it, its always true. Whenever I pay cash the amount is always round and if there is a posted price for the drink its that price with no tax. Whenever I pay with card, the total is never round.

I had originally thought that for some reason alcohol prices in Chicago had tax included, but that does not seem to be the case.
This hasn't been my experience.. I've never noticed a difference paying cash vs. credit in bars. But we're probably hanging out in different bars. :)

While I am not an expert I believe it has to do with how the establishment is licensed and whether or not they serve food. I believe the Sales Tax comes into play when you are provided "table service". If the bar doesn't get serve food than I don't think they have to charge you this tax regardless if you run a tab or not. If the establishment serves food than I think they have to charge you a fee if you open a tab because the city views this as the equivalent of table service. If you pay as you go than you aren't receiving the table service and therefore are exempt from the tax. Someone may have better information but I seem to recall hearing that the big factor is whether or not "food" is served at the facility.

chiil1974 that would make sense as Barleycorn's does serve food (albeit not the best in town!) so they most likely would view an open tab much like a meal. This is something I'm going to pay more attention to in the future!

While I am not an expert I believe it has to do with how the establishment is licensed and whether or not they serve food. I believe the Sales Tax comes into play when you are provided "table service". If the bar doesn't get serve food than I don't think they have to charge you this tax regardless if you run a tab or not. If the establishment serves food than I think they have to charge you a fee if you open a tab because the city views this as the equivalent of table service. If you pay as you go than you aren't receiving the table service and therefore are exempt from the tax. Someone may have better information but I seem to recall hearing that the big factor is whether or not "food" is served at the facility.

Interesting hypothesis. I paid a little attention this weekend.

I had dinner and drinks at Wishbone restaurant on Lincoln. Charged tax on the entire amount.

I then had drinks only at Toons on Southport. I ran a tab and was not charged any tax at all.

I then had drinks and wings at Lucky on Clark St. and was charged tax on the wings but not the beers.