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Illinois retailers sue Cook County to halt sugary drink tax

[June 28, 2017] By Julia Jacobs

CHICAGO (Reuters) - A group of retailers Tuesday sued Cook County, Illinois, to try to block the sweetened beverage tax scheduled to go into effect in the Chicago area on Saturday, arguing it is unconstitutional and too vague for stores to implement.

As part of the Cook County Circuit Court lawsuit, the Illinois Retail Merchants Association is seeking an injunction preventing enforcement of the law and a declaration that it is invalid.

"This ordinance is incomplete and it's a perfect example of the disaster that awaits when policies are hurried through without serious thought to how they might impact the businesses that have to try to comply with these policies," the retailer association's president, Rob Karr, said in a statement.

The Cook County Board of Commissioners passed the tax last November. It applies to all bottled sweetened beverages, including soda, sports drinks and energy drinks.

Cook County, which includes Chicago and its surroundings, joined a growing number of localities that have adopted measures to cut consumption of sugary drinks for health reasons, including Seattle, Philadelphia and San Francisco.

Cook County Board President Toni Preckwinkle's spokesman, Frank Shuftan, said in an email that county officials are still reviewing the lawsuit and they intend to "aggressively defend" the ordinance in court. Preckwinkle previously lauded the tax as a benefit to public health and a necessary way to increase revenue.

Officials with the Cook County Department of Revenue, which the association also named in the lawsuit, could not be reached for comment.

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The state retail organization, which represents more than 20,000 stores, asserted in the lawsuit that the county's penny-per-ounce beverage tax violates the state constitution by imposing different taxes on similar beverage products.

For example, a packaged sweetened ice tea would be subject to the tax, while a similar drink served from behind the counter would not, the complaint said.

The tax also makes retailers vulnerable to becoming ineligible for the federal Supplemental Nutrition Assistance Program, or SNAP, according to the complaint, because the program prohibits purchasing food that has a state or local sales tax. The program provides food benefits for millions of U.S. low-income individuals and families.

Other parties suing the county include Berkot Super Foods, Fairplay Foods, Chiquita Food Market, Leamington Foods, Tony's Fresh Market, Valli Produce and Walt's Food Centers.

(Reporting by Julia Jacobs; editing by Taylor Harris)

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