A judge has issued a temporary restraining order against a Cook County, Illinois, beverage tax that some retailers have argued is unconstitutional. (2011 file photo/Bertrand Guay/AFP/Getty Images)
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An Illinois judge has choked a soda tax from being implemented in Cook County after opponents of the tax argued it's unconstitutional.
Circuit Judge Daniel Kubasiak on Friday issued a temporary restraining order, blocking the tax from going into effect, the Chicago Tribune reported.
The decision came just days after the Illinois Retail Merchants Association and several other grocers sued the Cook County Department of Revenue for pushing a tax they believe to be too vague and in violation of the state’s Constitution.
County officials, though, have argued the tax, which would add a penny per ounce for all sweetened beverages, is necessary to pay for shortcomings in the county’s budget and will improve the health of the municipality’s 5.2 million residents.
“The court is fully aware of the importance of the tax to defendant’s budget,” Kubasiak wrote in his decision. “However, the court believes it is necessary to maintain the status quo in order to protect the interests of all consumers, all taxpayers, and the effected merchants.”
Opponents of the proposal have argued that — under Illinois’ Constitution — similar items should be taxed uniformly, not variably. As the policy is written, drinks in a bottle or from a fountain machine are subject to the tax. But custom-sweetened beverages, like mixed drinks served on-demand, are not taxable.
Purchases made with food stamps are exempt from the tax, too.
The beverage tax was first passed in November and, prior to the judge’s restraining order, was set to begin Saturday, the Tribune reported.
The lawyer representing the retailers, David Ruskin, argued Thursday that a temporary restraining order was needed because, should the tax be found unconstitutional, the county would have to issue refunds to all the customers who paid the added cost.
And if retailers decided not to add the tax, they would face a $1,000 penalty for the first offense and $2,000 for every subsequent offense.
“Those penalties,” Ruskin said, “are going to put retailers out of business.”
The county, of course, sees the issue differently. James Beligratis, an assistant state’s attorney, said the concerns over the tax are a “conjured-up scenario” that could arise with any new tax.
“This is a lawful tax,” Sisavanh Baker, another assistant state’s attorney, told Kubasiak on Thursday. And if the tax was deemed unconstitutional, she said, the money collected could be returned.
The judge, however, wondered how customers would claim refunds if the tax was nixed. Baker dismissed the concern, arguing consumers regularly save their receipts.
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