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Chicago Businesses Perplexed by Beverage Tax

Confusion remains as to how business at convenience stores and restaurants will be affected by Cook County’s new penny-per-ounce beverage tax.
August 10, 2017

​CHICAGO – The new tax increase on sweetened beverages in Cook County “is hard to swallow for operators of restaurants, convenience stores and other businesses in La Grange, Burr Ridge and Western Springs,” reports the Chicago Tribune, and some consumers aren’t thrilled about the new tax as well.

The news source notes that the new tax hike adds 1 cent per ounce on the retail sale of all sweetened beverages. Despite a court battle that delayed the tax, it took effect on August 2. The tax covers any non-alcoholic beverage sweetened by sugar or artificially (i.e., Splenda), including packaged and fountain drinks. The tax applies to soda and diet soda, ready-to-drink sweetened coffees and teas, sports and energy drinks, and juice products that aren't 100% fruit or vegetable juice.

A La Grange Park resident who purchased a bottle of soda at a Mobil gas station told the news source that the increased cost may not prompt her to drive to nearby DuPage County, but she will seek bargains at other nearby retailers. "I am not rich," she said. "I have two kids and they get thirsty. I will try to get drinks that are cheaper. Or I will go to the dollar store where they have bigger [bottles]."

Steve Palmer, owner of Palmer Place restaurant in La Grange, told the news source that it’s too early to determine the impact of the beverage tax on his business. "We don't know what to expect," he said. "We're still trying to figure out how to properly charge for this." However, mixed drinks pose a problem.

"How do you pass on that tax on a mixed drink [that has a splash of soda]?" Palmer commented, adding, "How do you charge that tax because it's not exempted?"

And then there’s the issue of refills, which many restaurants don’t charge extra for. "Up until this moment we've always done free refills," Palmer told the Tribune. "Do we tax for that?"

Palmer also commented that he’s already paying the tax, which is settled when the distributor brings syrups for the beverages. He told the Tribune that he previously paid $60 to the distributor, and now pays $99. "I've already paid the tax, now I have to collect it back," he said.

Meanwhile, John Shibu, manager of a Mobil Gas Station in La Grange Park, had a few words for the Tribune about the new tax: "I'm mad."

An associate at a 7-Eleven in La Grange added that he thinks the tax is already having an impact on business. "We don't see our regular customers, the ones that come in and buy refills," he told the Tribune.

"It's just a really poorly written law," Palmer told the news source. "Obviously no one in the restaurant business was sitting at the table. [Cook County officials] think it's simple, but they're foolish."

Palmer added that he can envision how the beverage tax could prompt some residents to go elsewhere to eat, especially if a family of five calculates how much the added costs will affect their ability to dine out in Cook County. "You start to question where you're going and what you're doing," he said.