Consumers Accuse Chains of Misapplying Illinois Soda Tax

CHICAGO (CN) – Illinois consumers took their outrage over Cook County’s new sweetened-beverage tax to court just a week after it took effect, accusing McDonald’s, 7-Eleven and Walgreens of applying the tax to unsweetened drinks and overtaxing sodas.

Cook County’s new tax on sugary beverages went into effect Aug. 2 and has already spawned a rash of lawsuits against retailers who have allegedly slapped the tax on unsweetened drinks as well.

The county’s sweetened-beverage tax ordinance imposes a tax of a penny-per-ounce on sugary drinks like soda, sweetened coffee and tea, and energy drinks. It does not apply to 100 percent juice drinks, unsweetened sparkling water or tea, or bottled water.

Yvan Wojtecki filed a class-action lawsuit against McDonald’s Corp. on Tuesday in Cook County Circuit Court, claiming the fast-food restaurant applied the soda tax to the pre-tax price of his drink, so he was overcharged 2 cents. He seeks punitive damages equal to at least one percent of the annual revenue of Cook County McDonald’s restaurants where the violations occurred.

In a separate class action filed late Friday, Vince De Leon says he purchased a case of Dasani Tropical Pineapple Sparkling Water from Walgreens and was charged under the ordinance, even though the product is clearly labeled as unsweetened. He demands a refund, and at least $50,000 in damages.

And Kelly Tarrant sued 7-Eleven on Wednesday, also in Cook County, after she bought a Big Gulp iced coffee without adding any sugar, but was charged a sweetened-beverage tax of 28 cents.

When Tarrant complained to the manager about the added tax, she was allegedly told that “the tax is programmed in the 7-Elevan store information system and that the system automatically charges the sweetened beverage tax to all beverages purchased in Gulp cups, regardless of whether the beverage is subject to the sweetened beverage tax.”

She wants a refund of the improperly levied tax for herself, and all others who were also wrongfully charged.

The tax is expected to bring in $17 million a month for the cash-strapped county, which is home to Chicago, the nation’s third most populous city.

While public health was cited as the purpose of the new ordinance governing the tax, county officials admit the money it will generate is crucial to their operating budget this year.

Retailers sued to block the tax ahead of its scheduled effective date of July 1, forcing the county to lay off over 400 employees due to lacking funds while a temporary restraining order was in effect. County Board President Toni Preckwinkle said a total of 1,100 jobs could be lost if the tax could not be collected.

Illinois Retail Merchants Association Vice President Tanya Triche Dawood told DNAInfo Chicago that her organization is working with businesses to work out the kinks and correctly apply the tax.

“I know that they’re doing the best job that they can, but, as you can imagine, with all the thousands of products that can qualify there will probably be some mistakes made,” Dawood said.

Walgreens spokesperson Phil Caruso declined to comment on the lawsuit.

The two other accused retailers did not immediately respond Wednesday to a request for comment.

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