CHICAGO -- A Cook County circuit court judge has delayed the implementation of a sweetened-beverage tax in the county to give the court time to determine if the tax is unconstitutional.
Scheduled to kick in July 1, the tax was delayed to July 12 by Circuit Judge Daniel Kubasiak, who granted the temporary restraining order just days after the Illinois Retail Merchants Association and several grocers filed a lawsuit against the Cook County Department of Revenue seeking to block the tax, which they argue is unconstitutional and too vague, according to a report in the Chicago Tribune.
County officials have said the penny-per-ounce tax is needed to pay for services and will improve the public's health over time. How long the temporary restraining order remains in place, and whether the judge later decides to permanently block the tax on a wide variety of sugar- and artificially sweetened beverages, will determine how much the county will have to adjust its budget.
This year, county officials anticipate about $67.5 million to come from the beverage tax.
"The court is fully aware of the importance of the tax to defendant's budget," Kubasiak wrote in his ruling, according to the newspaper. "However, the court believes it is necessary to maintain the status quo to protect the interests of all consumers, all taxpayers" and the affected merchants.
Cook County Board President Toni Preckwinkle said she was disappointed and planned to ask the appellate court to vacate the temporary restraining order. The county will "continue to aggressively defend our ordinance," she said.
Preparing for the soda tax has been a time-consuming process for Chicago grocery chain Pete's Fresh Market, which was still testing the tax's implementation on its checkout system Friday afternoon when word of the judge's ruling came down.
"It's a relief," Vanessa Dremonas, executive officer for the family-owned chain, which has 11 of its 12 stores in Cook County, told the newspaper.
Getting ready for the soda tax required more than updating the checkout system, Dremonas said, citing a "trickle-down" effect that touched everything from signage and advertising to Instacart grocery delivery.
The temporary restraining order means the county can't impose the sweetened-beverage tax until at least July 12, when a hearing is scheduled on the preliminary injunction.
Whether the tax is unconstitutional will be taken up at a later date.
Retailers argue that, under the Illinois Constitution, similar objects should be taxed uniformly. Under the sweetened-beverage tax, drinks in a bottle or from a fountain machine are taxable. But on-demand, custom-sweetened beverages, such as those mixed by a server or barista, aren't subject to the tax. Also exempt: purchases made with food stamps.
David Ruskin, the lawyer representing the retailers, told the judge at a Thursday hearing that a temporary restraining order was needed because there isn't a system in place for the thousands of consumers who would be due refunds should the tax be found to be unconstitutional. That would make retailers vulnerable to class-action lawsuits by consumers, according to the Tribune report.
The county had argued that if the tax is found unconstitutional, dollars collected could be refunded, which means that there would be no irreparable harm.
Kubasiak sided with the retailers. He also said that the retailers "have persuaded the court that a fair question exists as to the constitutionality of the sweetened beverage tax."
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