District businesses may be able to sell liquor until midnight, if a budget proposed by Mayor Vincent Gray is approved by the D.C. Council in the coming weeks.

The budget proposal would allow stores to sell alcoholic beverages until midnight Mondays through Saturdays, as opposed to current laws which force stores to cease the sale of alcohol at 10 p.m.

Stores that sell beer and wine only would be able to sell until midnight on Sundays as well.

Along with the later hours, the budget – released April 1 – also calls for an increase in the sales tax from 9 to 10 percent on alcohol sold off premises, meaning not sold at bars and restaurants. The move to a 10 percent tax on package liquor would match it with the current tax rate for bars and restaurants.

“It is an opportunity to raise tax revenue for the city,” said Doxie McCoy, a spokeswoman for Gray, in regard to the off-premises liquor sales proposal.

Due to the District’s tight 2012 fiscal year budget – which faces an estimated gap of about $322 million – Gray has urged every District agency to identify cost savings, cost reductions and revenue opportunities to help balance the budget.

Selling alcohol later and increasing the sales tax would generate more taxable sales. The increased hours and sales tax would generate about $2.36 million, according to the budget.

On campus, Foggy Bottom Grocery remains open until midnight, but has a sign by its beer products noting the current 10 p.m. alcohol sales cut-off time.

“This is a great thing for the city,” FoBoGro owner Kris Hart said of the proposal, adding that the measure could increase general tax revenue and would allow businesses to grow and more jobs to be created. “If people who live in the city want to buy alcohol at 10:30 p.m., it doesn’t make sense that they have to drive to Virginia to get it. With this new proposal, the option would be there now.”

Hart said the proposal to stay open will help D.C. become more competitive with Virginia and Maryland businesses.

Foggy Bottom Association President Asher Corson said he sees that the city is trying to find new ways to raise tax revenue to balance the budget shortfall, but said he was uncertain about what the impact of the measure will be.

“A concern I have is that extended hours for liquor stores may encourage loitering and other disruptive activities,” Corson said.

This article was updated April 11, 2011 to reflect the following:
Due to a reporting error, The Hatchet incorrectly said Gray’s proposed extension of the hours businesses would be able to sell liquor would bring in $6,000 a year. In fact, it is estimated to bring in $2.36 million a year.