Illinois Judge Halts Cook County Soda Tax, for Now

CHICAGO (CN) – A Cook County judge put a temporary stop Friday to the county’s sweetened-beverage tax, which was set to take effect Saturday and would have hiked the price of sugary drinks by 50 percent.

Granting a temporary restraining order against the ordinance, Judge Daniel J. Kubasiak said during a hearing Friday afternoon that “as in surgery, the first rule of the court is to do no harm.”

A lawsuit was filed this week by the Illinois Retail Merchants Association and a number of grocery stores in a last-ditch effort to stop the law, which would raise the cost of sugary drinks by 50 percent, from taking effect.

In his written opinion, Kubasiak said, “Plaintiffs will be irreparably harmed if the tax goes into effect and is subsequently found unlawful. Plaintiffs will suffer from greatly increased administrative and overhead costs which could not be recouped.”

The judge also said there was not a reasonable way for the county to return any taxes it collects to consumers should the ordinance eventually be found unlawful.

“I believe this is a significant issue that should get a significant amount of consideration,” he said during the hearing.

Passed last November, the tax adds a hefty penny per ounce to soda, sweetened coffees and teas, energy drinks and fruit and vegetable drinks that are not 100 percent juice.

The Illinois Retail Merchants Association and co-plaintiffs focused their complaint on the fact that the tax will be charged on pre-bottled beverages, but not handmade ones.

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

“The Sweetened Beverage Tax creates classifications of sweetened beverages that are not based on any real or substantial differences,” the lawsuit states.

The retailers argued this coupled with the fact that retailers cannot charge the tax to those buying drinks with federal Supplemental Nutrition Assistance Program, or SNAP, benefits violates the uniformity clause in the Illinois Constitution.

County officials have touted the new tax as a way to improve public health, but also admit that it will raise funds for a municipality in dire need of financial help.

An attorney for the county lamented in court the estimated $17 million per month it will lose now that it can’t collect the tax during the proceedings.

Frank Shuftan, a spokesman for Cook County Board President Toni Preckwinkle, previously said the money that would come from the tax is critical to the county’s 2017 and 2018 budgets.

“We are committed to responsibly managing Cook County’s finances, making difficult decisions where and when necessary, and continuing to provide the critical public health and public safety services our residents expect that together comprise 87 percent of our operating budget,” he said. “And we will vigorously defend our position and the ordinance in court.”

Cook County has also filed a motion to dismiss the complaint.

A hearing for a preliminary injunction, which would extend the TRO until the judge’s final decision, will be held on July 12.

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