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More trouble for the pop tax?

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* Greg Hinz reports that the Illinois Liquor Control Commission has concerns about the legality of the way Cook County’s new pop tax is set up

In a letter to Cook County Board President Toni Preckwinkle, the commission wrote that even though the tax on sweetened beverages excludes alcohol, many of the wholesalers to which it applies distribute both kinds of products and therefore have to deal with the tax complications of the county’s new levy. As a result, it “may lead to practices that violate the Illinois Liquor Control Act.”

“ILCC is concerned that the unintended consequences of the refund and credit procedure for the sweetened beverage tax would result in ongoing, continuous violations of existing law,” commission Executive Director Donovan Borvan wrote. Other difficulties he cited include “extreme costs of enforcement and audit, and the potential for mandatory denial of deliveries to retailers.”

The letter concludes by asking for a meeting to discuss the matter. But even though it was dated nearly a month and a half ago, on June 30, the commission has not heard back, according to its spokesman. And Preckwinkle’s spokesman is strongly suggesting there will be no response.

“We do not support this two-month-old concern that a credit properly documented to address a tax refund would be deemed something of ‘value’ under the Liquor Control Act,” Preckwinkle spokesman Frank Shuftan said in an email. “Plus, this addresses beverages that are NOT under the jurisdiction of the commission. It is our understanding the trade group has provided guidance to their members on this matter, and the county remains available to the commission.”

If you click here for the letter, the issue in question is that booze distributors are forbidden by state law to provide anything “of value” to retailers. Because distributors will have to “provide refunds or credits to retailers on a regular basis,” that would be considered something “of value.”

Seems like a bit of a stretch, but whatevs.

* This pop tax is goofy on so many levels.

1) It likely won’t raise as much money as projected and revenues will continue to decrease as pop consumption (or in-county purchasing) falls. So, using this tax to plug a spending hole isn’t wise at all.

2) People would probably be more likely to support some sort of pop tax (albeit not one this high) if it was directly tied to health initiatives, particularly in schools.

3) We’re seeing just how “addicted” people really are to pop. The screaming about cigarette taxation was even louder, but most people accepted the fact that cigarettes are really bad for you. That acceptance level just isn’t as widespread about pop.

4) It’s too confusing for consumers and retailers, resulting in a completely botched rollout that has further angered everyone.

5) Threatening to sue IRMA for damages made Preckwinkle look vindictive and even somewhat dictatorial.

6) It’s causing county consumers to look at their receipts perhaps for the first time. And when they do, they’re seeing how high their other sales taxes are. And they aren’t liking what they see.

Did I miss anything?

* Meanwhile…

State Reps. Michael McAuliffe (R-Chicago), Christine Winger (R-Bloomingdale), Peter Breen (R-Lombard), Grant Wehrli (R-Naperville), and Keith Wheeler (R-Oswego) today introduced legislation, House Bill 4082, to immediately repeal the one-cent-per-ounce Cook County Sweetened Beverage Tax. The tax, which went into effect on August 2, will result in Cook County consumers having to pay on average 67 percent more for a 2-liter of pop, 43 percent more for a gallon of juice drink or sweetened iced tea, and 29 percent more for a 12-pack.

“This pop tax is a repeated example of another financial burden being imposed upon the people of Cook County. The vetting of this measure was short-sighted and irresponsible as roll-outs of similar pop taxes in other cities have proven to be not effective and even harmful to the local economy,” stated Rep. McAuliffe. “I spent this past weekend in my district and the feedback against this tax was overwhelmingly negative. The taxpayers are understandably frustrated and there is a lot of confusion.” […]

Specifically, House Bill 4082 would prevent any home rule county from imposing a tax on sweetened beverages based on volume sold. It applies to any county ordinance adopted on or before the effective date of the bill, repealing the existing Cook County ordinance.

posted by Rich Miller
Tuesday, Aug 15, 17 @ 11:36 am

Comments

  1. At a time when voters distrust government, these county officials throw gasoline into the fire, creating more.

    Amateurs.

    Comment by VanillaMan Tuesday, Aug 15, 17 @ 11:44 am

  2. If you don’t want to pay the pop tax, don’t buy soda. How difficult is that to understand?

    Comment by Collinsville Kevin Tuesday, Aug 15, 17 @ 11:46 am

  3. “If you don’t want to pay the pop tax, don’t buy soda. How difficult is that to understand?”

    Or juice drinks, coffee drinks, milk drinks, energy drinks. It’s a sweetened beverage tax, not a soda tax. Almost everything except sparkling water and Beer is taxed by it.

    Comment by AlanM Tuesday, Aug 15, 17 @ 11:59 am

  4. So she receives a letter from a state agency requesting clarification and never replies and in. Fact apparently will not reply, arrogance ? She threatens to sue someone who exercises their rights in court because she does not like it? Vindictive? A SLAP lawsuit made illegal by statute. How about just tone deaf. All the qualities people love in a politician

    Comment by DuPage Saint Tuesday, Aug 15, 17 @ 12:00 pm

  5. A lot of people are also ticked off that it doesn’t apply to food stamp purchases - which is being spinned as hard working people with a job have to pay this while people with a LINK card don’t.

    It’s an argument with a lot of racial overtones & undertones.

    Comment by Fax Machine Tuesday, Aug 15, 17 @ 12:07 pm

  6. Richard Boykin’s best shot of beating Preckwinkle would be if Rauner avoids a Sam McCann challenge, because if there is no action on the GOP primary, a lot of suburban Republicans will take the Dem ballot to try to vote out Preckwinkle after this (which would be bad news for Joe Berrios too).

    Comment by Fax Machine Tuesday, Aug 15, 17 @ 12:09 pm

  7. Fax Machine: what is the racial breakdown of food stamp recipients? You’re implying more minority’s than whites get them. If you don’t know the facts, maybe check your own assumptions.

    Comment by Anonymous Tuesday, Aug 15, 17 @ 12:23 pm

  8. A lot of people are also ticked off that it doesn’t apply to food stamp purchases - which is being spinned as hard working people with a job have to pay this while people with a LINK card don’t.

    It’s an argument with a lot of racial overtones & undertones.

    Agree,

    It does bring up a question if sugary drinks are bad enough for you that a special tax is required, should any government nutritional program provide incentives/support for their consumption?

    I am fine with sugary drinks being covered with SNAP, but I also don’t think my Diet Coke has a health cost of a penny an oz.

    Comment by OneMan Tuesday, Aug 15, 17 @ 12:27 pm

  9. === If you don’t want to pay the pop tax, don’t buy soda. How difficult is that to understand? ===

    Taxpayers can’t question the cost and merits of a tax? Their only choice should be choose to pay the tax or not? They shouldn’t voice their opinions or take that vote into consideration when choosing who to support for county board? Your comment is absolutely ridiculous and absurd.

    Comment by Just Observing Tuesday, Aug 15, 17 @ 12:37 pm

  10. Assuming this doesn’t get repealed right away, I’ll be interested to see what the store sales figures for the first month/quarter of this tax are, specifically at stores on both sides of the county line. If they are dramatic, such that many people are buying all their groceries out of the county, that might push the repeal momentum over the top.

    And answer the Liquor Control Commission for cripe’s sake.

    Comment by Ron Burgundy Tuesday, Aug 15, 17 @ 12:37 pm

  11. I have always liked Toni and I hate to say this. Toni Preckwinkle should not be reelected.

    Comment by Sad to say it Tuesday, Aug 15, 17 @ 12:47 pm

  12. Ron, if the tax does stay around a while I wonder how the sales would change over time. I’m guessing that most people will only go out of their way to buy soda elsewhere for a short time, and then return to routine. If Toni is hoping for the same she might try to whether the storm.

    Comment by Perrid Tuesday, Aug 15, 17 @ 1:00 pm

  13. Good list, Rich. I was a big fan of Preckwinkle before this.

    7. It is regressive (poorer folks pay greater percentage of their income on groceries in general).

    8. It’s being called a sugary drink tax, and yet it taxes drinks without sugar (I know, I know, diet coke isn’t good for you either, but there’s a lot of things that aren’t good for you).

    9. I could be wrong about this, but I don’t think it taxes some Starbucks sugary drinks (e.g., vanilla mocha double whatever), which are disproportionately consumed by wealthier residents.

    10. It provides incentives to dodge the tax. I stopped by a newer fast food place, and person in front of me asked “are you charging the new tax?” The response: “If you order iced tea, you aren’t charged the tax,” pointing at the self-serve iced tea (located right next to the soda fountain).

    11) Related to your point #1, it also will likely result in a loss of overall sales taxes, as residents near the Cook County border will shop for groceries elsewhere.

    12) Sodas are high margin for restaurants; this tax will result in fewer sodas being ordered, thus less money for small businesses (And potentially less business income tax for the state).

    Comment by Robert the Bruce Tuesday, Aug 15, 17 @ 1:03 pm

  14. As for that legislation, it will never see the light of day as it would create quite a trick bag for Cook County Democratic legislators who might be in somewhat competitive districts or might face a primary. Vote for this bill, and you cross the County Board President and Vice-Chair of the county party organization. Vote against it, and you tacitly endorse this rabidly unpopular tax and will have a harder time running away from it and saying it’s a county thing.

    Comment by Ron Burgundy Tuesday, Aug 15, 17 @ 1:05 pm

  15. –Ron, if the tax does stay around a while I wonder how the sales would change over time. I’m guessing that most people will only go out of their way to buy soda elsewhere for a short time, and then return to routine.–

    I think those like myself who live within a few miles of a county line (we already had a grocery store in our routine that was over the line), will go and never come back. Obviously much harder for those in the Chicago city limits so what you suggest is probably right there. Unless enterprising truckers buy it outside the county and drive it in ala a sad version of Smokey and the Bandit.

    Comment by Ron Burgundy Tuesday, Aug 15, 17 @ 1:08 pm

  16. === 10. It provides incentives to dodge the tax. I stopped by a newer fast food place, and person in front of me asked “are you charging the new tax?” The response: “If you order iced tea, you aren’t charged the tax,” pointing at the self-serve iced tea (located right next to the soda fountain). ===

    A cashier at a casual fast food joint told me the same thing (order the unsweetened fountain iced tea) . It’s a great trick for the consumer. Although, I think the tax for fountain stuff is on the syrup (paid for by the restaurant) so the tax, I believe, is being paid by the restaurant on consumption whether or not the consumer orders the sweetened drink at the counter.

    Comment by Just Observing Tuesday, Aug 15, 17 @ 1:28 pm

  17. I think the worst part of the soda tax is Bob Fiorreti is using it to try and make himself relevant. Flipping through the radio stations this morning I heard him on The Loop talking to mancow about how he has started an online petition and some other stuff against it. I’m wondering if he is going to try and run against Toni or use this to run for anything.

    Comment by BigLou Tuesday, Aug 15, 17 @ 1:45 pm

  18. Toni needs to go. She is now worse than Stroger.

    Comment by Ron Tuesday, Aug 15, 17 @ 2:04 pm

  19. Toni P., please cut spending. Please eliminate programs and county workers. The taxpayers of Cook County are sick and tired of this.

    Sincerely,
    A Cook County Resident that DOES NOT drink soda.

    Comment by Ron Tuesday, Aug 15, 17 @ 2:06 pm

  20. Toni is very nice but this was a mistake by her and her staff with regards to soda tax. Boykin will raise 420k by September 15th.

    Comment by Rocky Rosi Tuesday, Aug 15, 17 @ 2:11 pm

  21. Anyone but Toni for me now. I voted for her last time, but not next time.

    Comment by Ron Tuesday, Aug 15, 17 @ 2:12 pm

  22. The argument that the new tax won’t raise as much as projected and will reduce sales applied as well to cigarette tax hikes, which are even more regressive. But that didn’t stop the hikes, which raised revenue for Chicago and the county of Cook.

    Comment by anon2 Tuesday, Aug 15, 17 @ 2:21 pm

  23. Ron, if the tax does stay around a while I wonder how the sales would change over time. I’m guessing that most people will only go out of their way to buy soda elsewhere for a short time, and then return to routine. If Toni is hoping for the same she might try to whether the storm.

    I wouldn’t bet on it. I grew up going to IN for gas and, even though I now live on the North Side, continue to do so and have added soda to the list of things I no longer buy in the county. We’ve even made trips to the Costco in Lake County over the nearby Costco in Lincoln Park. It’s just an added errand when visiting the relatives on either end of the Chicagoland area. No sweat.

    Comment by RoscoeRatMatt Tuesday, Aug 15, 17 @ 2:26 pm

  24. The threat of a lasting boycott happens every time the Tollway Authority raises rates too. The boycotts never last The Tollway makes far more than before the hike.

    Comment by anon2 Tuesday, Aug 15, 17 @ 2:30 pm

  25. === it is regressive ===

    That’s true. So is every other tax and fee in the state except the flat income tax (albeit the state income tax is deductible on federal taxes, which helps only those who owe federal taxes.) The illinois state and local tax system ranks as one of the most regressive in the nation.

    The one way to significantly lower the system’s overall regressivity is to adopt a graduated income tax. Of course that is staunchly opposed by our conservative friends who use regressivity as an argument to fight the pop tax. Another way would be to give the county of Cook the authority to levy an income tax, the way Indiana counties can.

    Comment by anon2 Tuesday, Aug 15, 17 @ 2:46 pm

  26. Toni Preckwinkle needs to admit she was wrong about this and figure out a way to back out of it. She needs to take one for the team or she will be bringing a lot of other Democrats down with her.

    Comment by Joe M Tuesday, Aug 15, 17 @ 2:47 pm

  27. Democrats in Illinois have now passed Repubs when it comes to taxing those who can least afford it. But fear not simpletons. We know what’s best for you.

    Comment by blue dog dem Tuesday, Aug 15, 17 @ 2:48 pm

  28. It’s a regressive tax on the poor and middle class because the powers that be won’t take steps to enact a progressive income tax. The wealthy and republicans will always show great enthusiasm for these types of taxes and fees.

    Comment by Mouthy Tuesday, Aug 15, 17 @ 2:58 pm

  29. Preckwinkle is a Republican? The mental gymnastics displayed here some times are very impressive.

    Comment by Robert the 1st Tuesday, Aug 15, 17 @ 3:25 pm

  30. Once again it looks like big brother Repubs want to take a local issue out of the hands of those closest to it. Again I make the claim you can take the two party system, do the old switcheroo and nobody would know the difference. Heck, I bet if Repubs came out wanting greater union rights the Dems would do a 180.

    Comment by blue dog dem Tuesday, Aug 15, 17 @ 3:48 pm

  31. Has anyone asked any of the Dem gubernatorial candidates what they think of the sweetened beverage/soda tax concept? Seems fair to inquire since Cook County has a pile of voters and people always seem to want the governor to opine on people and things outside his purview or control.

    Comment by Responsa Tuesday, Aug 15, 17 @ 3:57 pm

  32. When Rauner was considerig a pop tax, there was polling that showed less opposition to taxing pop than for alternative revenue sources, such as property and income taxes.

    Comment by anon2 Tuesday, Aug 15, 17 @ 4:13 pm

  33. Mayor Bloomberg promotes this cause and supported passage of the soda tax. Looks like he walked Preckwinkle and her board off the plank and into an ocean of sharks. I Wonder who the Bloomberg casualties will be next March.

    Comment by Mike Bloomberg fizzeled Tuesday, Aug 15, 17 @ 4:51 pm

  34. Anon2. That’s a polling question similar to: which would you rather have. Stomach flu or head cold.

    Comment by blue dog dem Tuesday, Aug 15, 17 @ 4:58 pm

  35. Time for Toni and Joe to drop out. If you love the Democratic Party, you will do the right thing, and decide not to stand again for election. drop out Toni. now.

    Comment by Amalia Tuesday, Aug 15, 17 @ 5:43 pm

  36. We need a party that has fiscal sense and doesn’t have social views from the middle ages.

    Is that a lot to ask?

    Comment by Ron Tuesday, Aug 15, 17 @ 6:04 pm

  37. It seems Toni could have avoided so much negative publicity if she instead worked up an ordinance adding 1 cent to every taxable sale, regardless of what was sold. Just a penny times all those sales, every day, and she could have moved on to the next topic needing attention without all this damage to her career. I live a few miles from the Indiana border, and work in “pop runs” when possible to avoid paying the tax.

    Comment by revvedup Tuesday, Aug 15, 17 @ 6:06 pm

  38. What’s the difference between Toni and Todd

    Comment by Question Tuesday, Aug 15, 17 @ 6:15 pm

  39. Nothing

    Comment by Answer Tuesday, Aug 15, 17 @ 6:15 pm

  40. Remember when Toni was a reformer? She is an angry, vindictive person that separates the world into friends and enemies. Disagree with her and you go from friend to enemy. There is no redemption for her enemies. Run Boykin, run. She loses the primary to any credible candidate. She can’t lose the general but easily can lose the primary. Heard she had a rough reception at the Bud Billiken parade. Her and Barrios continue to damage the Cook County Dems. Enough. They have to go.

    Comment by Trapped in the 'burbs Tuesday, Aug 15, 17 @ 10:58 pm

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