Photo by Steve Metsch
Kevin McCarthy, manager of Fairplay Foods in Hickory Hills, thinks the Cook County tax on sugar beverages will hurt sales.
Cook County shoppers buying a pre-sweetened beverage will pay more, a lot more, starting Saturday.
That's when the county's new 1 cent per ounce tax on beverages containing sugar or artificial sweetener kicks in at grocery stores, convenience stores, restaurants and even taverns throughout Cook County.
That tax is on top of the 10.25 state and county sales tax, any local municipal sales tax and, in Chicago, the city's 3 percent tax on soft drinks.
The tax will drive up the price of drinks by as much as $2.88 for a 24-pack case of pop or 32 cents for a large fountain drink at McDonald's.
Starting Saturday, retailers will have to start collecting the tax on any non-alcoholic beverage that contains sugar or an artificial sweetener, which includes pop and diet pop, sweet teas, fruit juices that are not 100 percent fruit juice, sports drinks and energy drinks. It also applies to fountain drinks made from syrups, pop used in mixed drinks at a local tavern and even the free refills that many restaurants offer to dine-in customers. More than 1,000 products will be affected by the tax.
It does not apply to 100 percent fruit or vegetable juices, milk and milk substitutes, infant formula, beverages for medical use and any non-sweetened beverage even if sugar is often added by the buyer, such as coffee or iced tea.
When adopted in November, county officials said the tax would bring in about $200 million per year but added it was to promote a healthier lifestyle by making consumers cut down on sugary drinks that lead to conditions such as obesity and diabetes.
Here's how the tax will work: Retailers will pay the tax to their vendors when the taxed beverages are delivered. The vendors will then remit the tax to the county and the retailers will be required to recoup the tax from their customers.
All consumers will pay unless you are in the SNAP assistance program, which is a federal food stamp program that is exempt from the new tax.
"It's not something we like, but there's not much we can do about it," said Rick Abdelgader, owner of Lyons Food Market, which recently opened in the southwest suburb. "You'd think there other things that they could tax besides beverages."
"I don't think a lot of people are aware that this new tax will be going into effect on Saturday," said Abdelgader. He said he had received a list of products affected by the new tax from his vendors.
He said the tax would probably cut down on the sale of two liters at his store more so than 16-ounce or 20-ounce bottles because of the amount of tax involved, which is based on the size of the beverage.
The impending tax does not sit well with Kevin McCarthy, manager of Fairplay Foods, 8631 W. 95th St. in Hickory Hills.
“It’s going to be really rough on our consumers and on jobs. It’s pretty scary,” McCarthy said Tuesday afternoon.
He thinks some customers may drive a few miles west to DuPage County to buy their soda pop and other beverages subject to the tax.
And when they do that, they’ll likely remember they need produce, milk, bread, cereal and other items to decide to complete their grocery shopping, meaning money that had been spent at Fairplay and other stores in Cook County will be spent outside the county.
“Exactly. It will hurt everybody all the way down. A lot of people will be affected by this,” McCarthy said.
There are seven Fairplay Foods stores on the South Side of Chicago and in the south suburbs.
McCarthy thinks “it’s a possibility” there may even be layoffs at stores in Cook County as a result of the tax because there could be less money coming in.
“Any time you lose business, you lose revenue,” McCarthy said. “It’s going to be scary to see what’s going to happen.”
He was never approached by anyone from the county for his opinion on the tax, he said.
This week’s circular for the store includes a reminder – in a bright yellow box – of the impending tax.
There are signs in the beverage aisle that caution a two-liter bottle of soda pop will cost an extra 67 cents thanks to the tax, and urges customers to visit StopTheCookCountyTax.com. “Every sip,” the signs say, “will cost a cent.”
The ads and signs are on display because he doesn’t want customers to blame the store for raising the prices. “Some people don’t understand that it’s out of our control. But when they see the prices, it’s going to be sticker shock,” McCarthy said.
Some shoppers are not pleased, either.
Mary Ann Smolen, of Justice, said the county should not hike the tax “because I love my pop.”
“They should not raise the tax. Groceries are expensive enough. People are going to go to DuPage County. Stores (in Cook County) are going to lose a lot of business. You’re going to see more pop sitting on the shelves,” Smolen said.
Switching to water is not an option for Smolen.
“Aw, man, there’s no taste in water. And this is good when your stomach is upset,” Smolen said pointing to a two-liter bottle of 7-Up.
Sam Toia, president and CEO of the Illinois Restaurant Association, said, "This is a regressive tax that drives up costs for thousands of Cook County businesses, residents and working families. At the very least, businesses deserve more time to comply with the complicated regulations and administrative burden of this misguided tax.”
One last attempt to stop the tax was made Tuesday when the Illinois Retail Merchants Association and several individual stores filed suit in Cook County to issue a restraining order and preliminary injunction that would prevent the tax from being collected.
Despite that effort, the mood on the Southwest Side of Chicago -- long weary, many would say, of a parade of sales tax increases over the last 35 years -- seemed mostly "Whatever."
Don Krzyszinki, a resident of Chicago’s Clearing neighborhood, said he didn't think the new county tax would affect many city businesses.
"When it's a Chicago-only tax, sure, there's an impact -- especially in neighborhoods like this that border the suburbs," he said as he waited in line at Beefy's, an iconic fast-food restaurant at 5749 S. Harlem.
"City taxes are why you see that over there," he said, gesturing toward the usual overflow dinner crowd across the street at Portillo's on the Summit side of Harlem. "That Portillo's drove Zig's (a longtime fast-food favorite in Garfield Ridge at 56th and Harlem) out of business back in the '90s. But a countywide tax like this? No impact. What am I going to do, drive out to DuPage County for a hot dog, fries and a shake? Nope."
Patty Ruiz, also from Clearing doesn't like the new tax, "but at this point, who will notice?" she asked rhetorically as she walked out of Fair Share Finer Foods, 6422 W. 63rd St.
"These politicians all make their six-figure incomes that we pay them. They make more than double what my husband and I make, put together. But what choice do we have? I'm not going to spend a lot of time getting mad about this. I have a mortgage and two car payments to worry about. This tax is like, yeah, whatever."
Tim Hadac and Steve Metsch contributed to this story.