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The Tale of Cook County’s Sweetened Beverage Tax

When it comes to sugary beverage taxes, nothing is ever quite simple.

In the past, The Food Institute Blog has looked at the tax in Philadelphia and a similar ordinance in Berkeley, CA. Although retailers and the municipalities typically engage in some sparring citing pending litigation, these laws typically go into effect.

Enter the Cook County version.

Cook County, IL, first approved a penny-per-ounce tax on sugary drinks, in hopes of raising $200 million a year, in November 2016. It was the seventh local government in the U.S. to pass such a levy, and was by far the largest area. The tax was originally set to go into effect on July 1, 2017, reported MarketWatch (Nov. 10, 2016).

The Illinois Retail Merchants Association sued Cook County, IL, to block the sweetened beverage tax scheduled when it was scheduled to take effect July 1. The organization claimed the law violates the state constitution by imposing different taxes on similar beverage products, and it sought an injunction preventing enforcement of the law and a declaration finding it invalid, reported Reuters (June 27).

A Cook County judge then extended the restraining order on the tax. County lawyers argued Illinois law permits differential taxation, while attorneys representing the Illinois Retail Merchants Association countered that there was no substantial difference in how sweetened beverages are classified, making the tax unfairly vague for consumers and distributors, reported Chicago Sun-Times (July 21).

About two weeks later, a judge allowed the beverage tax to take effect Aug. 2. The judge dismissed the Illinois Retail Merchants Association’s lawsuit. “We applaud today’s decision by Judge (Daniel) Kubasiak granting our motion to dismiss the plaintiff’s lawsuit challenging the sweetened beverage tax,” Cook County Board President Toni Preckwinkle said in a statement. “We believed all along that our ordinance was carefully drafted and met pertinent constitutional tests.”

“We are disappointed by today’s ruling,” Illinois Retail Merchants Association president Rob Karr said. “I can only imagine the outrage that is being felt by consumers throughout Cook County who may soon have to pay this tax,” reported St. Louis Post-Dispatch (July 28).

But do you think this tale is over?

The decision was appealed by the Illinois Retail Merchants Association. The retail group wants to determine if judge Daniel Kubasiak used the proper standards when he dismissed the lawsuit. The appeal still contends that the new tax is inconsistent in how it is applied, reported Chicago Patch (Aug. 1).

Although the law is now in effect, I have a feeling this one will play out a little longer before a definitive answer is given. As always, stay tuned to The Food Institute Blog and Today in Food for the latest updates on this ongoing story.