December 11, 2017

December 11, 2017

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Illinois Cook County Soda Tax Becomes Effective Aug. 2

As previously reported on this blog, a Cook County Ordinance that imposes a $0.01 per ounce tax on the retail sale of sweetened beverage was temporarily blocked after the Illinois Retail Merchants Association and others filed a lawsuit to block the tax. On July 28, 2017, Cook County Circuit Judge Daniel Kubasiak dissolved the temporary restraining order and dismissed the lawsuit.

The tax applies to bottled sweetened beverages, including soda, sports drinks, flavored water, energy drinks, and pre-made sweetened coffee and tea with less than 50% milk content. Infant formula, unsweetened drinks to which a purchaser can add or request that a retailer add sugar at the point or sale, 100% fruit juices, and beverages for medical uses are among the products exempted from the tax.

In an article on the Cook County soda tax, Illinois Policy said that the tax makes soda sold in Chicago among the most expensive in the country. As an example, the organization pointed out that that the Chicago soft drink sale tax of $0.12 combined with the Chicago sales tax of $0.41, along with the Cook County sugary drink tax of $1.44, will increase the cost of a 12-pack of 12-ounce cans of soda from $4.00 to $5.97.

Cook County expects to receive $200 million annually from the tax. After the lawsuit was dismissed, Cook County Board President Toni Preckwinkle explained in a statement, “The delay in implementing the tax caused by the merchants’ lawsuit forced us to put into motion cost-saving measures to cope with this revenue loss, which currently is at least $17 million.”

The Illinois Retail Merchants Association responded to the ruling in a July 28 tweet, stating, “We are disappointed with the judge’s ruling on Cook County’s sweetened beverage tax. We are exploring our legal options.” Stay tuned for further developments concerning beverage taxes imposed by Cook County and other jurisdictions.

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