Connections for Success

 

11.30.16

New Tax Leaves Cook County Restaurants Feeling Unsweetened
James Pellino

Former New York City Mayor Michael Bloomberg made headlines when he attempted to ban oversized soft drinks. While the effort drew much controversy, municipalities and states across the country began to take a different spin on the idea.

As Illinois and its counties continue to look for more ways to generate revenue, local legislators have turned their attention to taxing items deemed unhealthy to its citizens. Cook County is no exception, as many restaurateurs were aware of the proposed tax Cook County Board President Toni Preckwinkle wanted to impose on sugary drinks.

The proponents’ reasoning for this tax was twofold:

  1. It would bring in much needed additional revenue and bridge a gap in the counties’ budget; and
  2. It would also theoretically dispel consumers from purchasing sugary drinks that are deemed as unhealthy options.

Opponents of the new tax bill, which included many small-business owners and restauranteurs, argued that the tax would stifle businesses in the county and incentivize people to go to neighboring counties to purchase these items.

In early November, the Cook County Board voted and made the tax official. The new tax narrowly passed with a 9-8 vote. Therefore, starting on July 1, 2017, a penny-per-ounce tax will be placed on sugary drinks sold in Cook County, which include soft drinks, lemonade, iced tea and energy drinks. Chicagoans will feel the hit a little harder since the city already places a 3% tax on the sale of canned or bottled soft drinks.

No matter what your stance is on the new tax, it is important as a business owner and restaurateur to make sure you are ready for the tax.  Be sure to set a reminder in June 2017 to update your point-of-sale system to include this additional tax on any applicable drinks. There will also be new filing requirements. Cook County states that the tax will be reported on its own tax form. Because it is a new tax, the tax forms will be a paper file form.  Eventually the county will look to make the tax return an electronic filing.

If you have any questions regarding the new sugary drinks tax or about any other county, city or state taxes already in practice, please contact Jim Pellino at jpellino@orba.com, or call him at 312.670.7444. Visit ORBA.com to learn more about our Restaurant Group.

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