Industry News / Sweet / Regulatory Compliance / Beverages

Chicago's Cook County Soda Tax Blocked

By Lauren R. Hartman, Product Development Editor

Jul 06, 2017

On June 30, a judge blocked the one-cent-per-ounce tax in Cook County, Illinois, on soda and other sweetened beverages, until at least July 12, says the Chicago Tribune. The tax would have gone into effect on July 1. The ruling from a circuit judge to grant a restraining order came just days after several grocers and the Illinois Retail Merchants Association filed a suit against the Department of Revenue in Cook County seeking to block the implementation of the new tax, which they say is too vague and unconstitutional.

It has been common lately to see consumers stocking up on soda as well as other beverages that would fall under the soda tax. Retailers located outside of Cook County limits mentioned the tax while advertising. County officials say that the tax was necessary to cover services and help improve the health of the public over time.

The duration of the temporary restraining order, and whether the judge decides later to permanently block the soda tax covering a range of artificially and sugar sweetened beverages, will be factors in the amount the county will need to adjust its budget.

In 2018, the county was planning to take in a reported $200.5+ million in beverage taxes. Without that revenue, substantial spending cuts are likely to take place, unless other fees or taxes are raised.

The temporary order prohibits the county from imposing the tax on sweetened beverages until July 12, when there is a scheduled hearing on the injunction announced on June 30. Reports claim the question of the tax being unconstitutional will not be taken up until another later date. The county says that if this tax is determined to be unconstitutional, the dollars collected would be refunded.

Other cities are postponing their soda tax bans. Portland's plan to tax soda has been put on hold until 2018.