Coping with the Smoking Ban

The upper-most question in your mind is “exactly how will the law affect me and my business?” The answer is simple; if you operate a business and are open to the general public this bill affects you. The law will go into effect immediately.

This explanation is intended for those clients in Philadelphia who have liquor licenses. Specifically those of you who are considered corner bars are the businesses that will be affected the most. The statistics show that 90% of your customers and probably 95% of your employees smoke. The answer in the past has always been that they can go someplace else to drink if they want a non-smoking environment.

Similar laws have been passed most recently in the state of New Jersey, the state of California and the cities of New York and Boston. Washington DC has a bill pending in their City Council and eleven other cities in the US are considering a smoking ban. There are really no precedents to base the impact this will have on your business. Making a comparison to New Jersey or California is irrelevant because these are states. Your customers have the same option they had in 1995 when Philadelphia enacted the liquor by the drink tax. They can go across the city borders to another county; this new law gives them an additional incentive to do that.

The only fair comparison to make is with New York and Boston, if you can call that a fair comparison. I personally do not think that we have a lot in common with New York; we have more in common with Boston. In any event, a corner bar is a corner bar especially in a blue-collar neighborhood. I have done some research, and it appears as if they have adapted but are not coping well. It was reported in a March 2004 Washington Times article that the average small privately owned bar in New York has lost around 30% of its business due to the smoking ban. The City Council in New York is considering revisions. There are no statistics available as to how long it took for the cities to be fully acclimated. We all eventually get use to change. Look at how we have accepted the current gas prices.

As usual the Philadelphia City Council never takes into consideration the impact this will have on the number of people these establishments employ, or their contribution to the tax revenue, especially the liquor tax.

I think we are going to have to just grin and bear it; we are all in the same boat we need to be more concerned with the effects of the enforcement and who will be doing the enforcing. The Mayor stated in signing the bill that the responsibility for the enforcement of this new law will fall on the Department of Licenses and Inspections. The bill takes effect immediately so look out. I would suggest posting signs saying “No Smoking Allowed.”

This presents a multitude of possible hidden problems; too many to innumerate here. The city has mailed out letters warning anyone owing more then $ 1000.00 in city taxes is a candidate to be shut down if the taxes are not settled. To be safe I would address these issues immediately.

As usual the actual bill signed is ambiguous at best. The average non legal ease reader will have difficulty deciphering what it means. There is a section on how to apply for an exemption from the smoking ban. I seriously doubt if many of the bars will apply. It requires all your taxes to be paid and proof provided of their payment. It also requires proof of sales showing that you do less then 10% of your sales in food. The requirements are extensive and I know from experience that most of you do not have the required record keeping to prove you qualify for an exemption.

Private Clubs need to follow the same rules for an exemption. In addition there are membership and board requirements. If you are interested in applying for the exemption you should contact your accountant and your attorney. You may also contact us directly for assistance and information.

In my opinion the risks far out-weigh the perceived benefits. In the event you should choose to apply for an exemption and fail, you are still laying yourself open for a further examination. This examination would include both a physical and financial evaluation of your facility to determine your compliance.

Applying for this exemption puts the Liquor Board on notice too. Remember you have an “R” license; in Pennsylvania you are not considered a bar. The Pennsylvania Liquor Code defines a restaurant:

“Restaurant shall mean a reputable place operated by responsible persons of good reputation and habitually and principally used for the purpose of providing food for the Public, the place to have an area within a building of not less four hundred square feet, equipped with table and chairs, including bar seats, accommodating at least thirty persons at one time. The board shall by regulation, set forth what constitutes table and chairs sufficient to accommodate thirty persons at one time.”

As you can see the definition is devoid of the mention of any required quantity of food substances on the premises. This to my knowledge has always been a misconception in applying this definition. Do not open up a can of worms by applying for this exemption. You are all in the same boat. Deal with it.

To add a few remarks suggested by an attorney friend, “Once this ban goes into effect and you the bar owners see by your own experiences how negatively this ban is affecting your business, hopefully you will be jolted out of your apathetic coma and raise hell. The law passed by a slim margin and Nutter, the bills’ sponsor is out of City Council. This abhorrent restriction of our civil liberties is tyranny and can and must, be repealed.”

It is not too late to act. This law can be repealed. In the meantime learn the rules and abide by them. Follow my suggestions and contact your tavern associations for further assistance. I have posted the entire City Council Bill on my website for review and download. You can contact us by email or phone with any questions or comments.

Licensed Beverage Association Philadelphia Licensed Tavern and Merchants Association
Eleanor Driscoll President Prince Gillard
215-333-3233 215-457-1837
6810 Frankford Ave
Philadelphia, Pa. 19135-2146

Call now join these organizations. Get involved– it is never too late. The bill can still be repealed, or modified to be more considerate of the bars. However, the Mayor wants to make the law tougher, not lessen the restrictions. You need to join now and urge City Council, and your individual council members to change the bill…1st District Councilman Frank DiCicco introduced a companion bill in June that would delay the start of the ban until January. Contact Mr. DiCicco directly at (215) 686-3458 or fax (215) 686-1931. You can also contact any member of City Council by email by going to their website…

Martin A. Dershowitz, P.A.

Dershowitz & Company