Illinois County Wins Fight to Tax Sweetened Drinks

CHICAGO (CN) – Cook County’s new tax on sugary beverages will soon take effect after a state judge on Friday ended a month-long court battle to block it.

Cook County Circuit Court Judge Daniel J. Kubasiak ruled in favor of the county’s motion to dismiss a lawsuit attempting to strike down the sweetened-beverage tax that was filed just days before the tax was supposed to take effect on July 1.

The tax was put on hold via a temporary restraining order while the Illinois Retail Merchants Association and a group of grocers argued their case. The TRO was also lifted Friday.

It is unclear when the new tax will officially take effect, as no date has been set for its implementation.

Standing to address the full courtroom Friday afternoon, Judge Kubasiak read from his written opinion.

“This Court is not charged with evaluating the progressive or regressive nature of this tax, or any tax. It is not charged with evaluating and weighing the political wisdom of this tax or any possible alternatives,” the ruling states.

Instead, Kubasiak continued, he determined that the plaintiffs did not sufficiently prove that the ordinance imposing the tax is unconstitutional.

Adding a hefty penny-per-ounce to sugary drinks like soda, sweetened coffee and tea, and energy drinks, 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.

Over 400 employees have already been laid off in the last month, with the county blaming the missing sugar tax revenue while the TRO 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.

Assistant State’s Attorney Kent Ray hinted in court that Cook County may file a motion for damages incurred by the delay of the revenue stream.

The Illinois Retail Merchants Association and its co-plaintiffs in the lawsuit argued the ordinance goes against the state constitution’s uniformity clause, as ready-made drinks will be taxed but custom-made drinks will not.

For example, a bottled Starbucks Frappuccino purchased at a grocery store would get the extra tax, but the same drink made by a barista at a Starbucks store wouldn’t.

On top of that, they claimed, retailers cannot charge the new tax for customers using federal Supplemental Nutrition Assistance Program, or SNAP, benefits, burdening stores with figuring out how to charge them.

David Ruskin, one of the plaintiffs’ attorneys with Horwood, Marcus & Berk Chartered, said in court last week that “there are no real and substantial differences between [ready-made and custom-made] beverages,” as both can have sweetener in them.

“The health concerns are the same,” he said.

In its defense, Cook County argued that custom-made drinks are different because it is harder to tell how much sweetener goes into each drink based on customer requests, and taxing those drinks would put a burden on the businesses selling them.

“The uniformity clause is not a straightjacket,” Ray argued for the county a week ago.

“There is certainly no need to tax all beverages with sweetener in them for this tax to be sustained.”

Richard Boykin, a Cook County board commissioner, thinks an appeal will be filed.

“I suspect this is just round one,” he said outside the courtroom Friday.

“Today is a bad day for the taxpayers of Cook County,” Boykin added.

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