After only being in effect for two months, Illinois’ Cook County, which includes the city of Chicago, repealed its controversial sweetened beverage tax on Tuesday. The Cook County Board of Commissioners voted 15-1 to repeal the bill, which taxed all non-alcoholic beverages containing sugar or artificial sweeteners, including juices made from less than 100 percent fruit juice, resulting in price increases of $0.01 per ounce ($1.44 per 12-pack of cans). Pending endorsement by Cook County President Toni Preckwinkle, the repeal will go into effect on Dec. 1, just in time for the holiday dining rush–a move that will no doubt provide a welcome boost for area restauranteurs.
Restaurateurs were hit particularly hard as their beverage service is reliant on wholesale purchase of syrups, which can include bar supplies and mixers. A typical 5-gallon bottle would incur a tax of $38.40 on top of its original cost. Unaffected were beverages in which sugar is added after the fact, such as coffee. Some unsweetened sparkling waters such as La Croix, Perrier and San Pellegrino also avoided the tax.
From its inception in November 2016, the tax was hotly contested and haunted by legal challenges, most of which was funded by big soda lobbyists connected to the American Beverage Association, who, in support of the “Can the Tax” campaign, spent $3.2 million battling the bill. Now, Cook County is scrambling to come up with over $200 million in replacement tax revenue.
Restaurateurs were hit particularly hard.
The tax was meant to help curb the growing obesity issues affecting Cook County, which sees a higher childhood obesity rate than the national average, but it ended up being a thorn in the side of local restaurateurs. It wasn’t the first time a sweetened beverage tax was implemented. It was first imposed in March 2017 but was not enforced until August, due to a lawsuit filed on behalf of the Illinois Retail Merchants Association.
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The repeal is supported by the Illinois Restaurant Association, an entity sponsored by both Pepsi and Coca-Cola, as well as the Illinois Beverage Association, a consortium of soft drink manufacturers.
Cook County and the city of Chicago aren’t the only battlegrounds for sweetened beverage taxes. A similar tax in Philadelphia, Pennsylvania, was hotly debated as recently as June 2017, though the appeal was struck down. Boulder, Colorado, has a $0.02 per ounce soda tax on the books to this day, while three major cities in California have similar taxes in place.
Restaurateurs with questions of how to implement these changes should reach out to their POS company to ensure their receipts and accounting are up to date.
Cook County restaurateurs in need of help with specific questions are encouraged to reach out to the Cook County Board of Commissioners Revenue Compliance division at [email protected]