Observations on Cook County’s Soda Tax From a Naperville Business Law Attorney

tax, Naperville business law attorneyLast month, a controversial new policy went into effect in Cook County, and consumers throughout the region are a bit unsure what to make of it. The new policy introduced a countywide tax on sweetened beverages in the amount of $0.01 per ounce sold, making the cost of soda in Cook County among the highest anywhere in the country.

As a business law attorney, I realize that the government has a duty and responsibility to provide for its citizens and that taxes are often necessary to generate the needed revenue to do so. I also understand that obesity and other health issues are major concerns in the United States. When a single county institutes such a drastic measure, however, it tends to affect the entire area—not just one jurisdiction.

A Long and Contested Road

The tax was originally supposed to take effect on July 1, but bureaucratic delays and a legal challenge by the Illinois Retail Merchants Association pushed the start date back two months. Health advocacy groups and county government union representatives have been vocal in their support of the tax, while consumer groups and fiscal conservatives have railed against its enactment.

The penny-per-ounce tax may not sound like very much, but it adds up quickly—totaling $1.44 for a regular 12-pack of Coca-Cola or Pepsi. Diet drinks are not exempt, as the tax applies to artificially sweetened beverages as well. The tax also applies to sport drinks, juice drinks that are less than 100 percent fruit juice, bottled coffee drinks, sweetened iced teas, and even “free refills” at sit-down restaurants.

As one might expect, the roll-out of the tax was not exactly perfect. Some retailers had applied the tax to non-sweetened beverages like seltzer water, while some customers put their sodas back when cashiers informed them of the added costs. Many soft-drink consumers said they would wait until they were in a different county to buy their beverages, as Cook County is the only municipality in the region to have such a tax.

Possible Repeal

Nearly two months have passed since the tax first took effect, and the battle has continued. The Cook County Board was set to vote on a repeal proposal last week, but the vote was delayed at least until next month so the tax could be further analyzed by the county’s Finance Committee.

Illinois House Speaker Michael Madigan has also come out in favor of repeal. According to reports, he is concerned about the numerous recent tax increases and is worried that too many taxes could have a negative impact on the region. Madigan reportedly encouraged county officials to reconsider the tax but was unsuccessful. He may now turn to legislation in Springfield that would effectively kill the county ordinance.

Questions About Taxes?

If you own and operate a business in the greater Chicago area and have questions about how the sweetened beverage tax could affect your company, contact an experienced Naperville business law attorney. We will work with you to ensure that you remain in full compliance with all applicable laws and help you develop a strategy for increasing your profitability. Call 630-756-1160 for a confidential consultation today.

 

Sources:

Chicago Tribune

WLS – AM890

CNN Money

PolitiFact