Sugary drink tax postponed by judge until at least July 12

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Friday, June 30, 2017

CHICAGO -- A judge has blocked implementation of Cook County's penny-per-ounce tax on sweetened beverages. It was set to go into effect Saturday.

Circuit Judge Daniel Kubasiak on Friday granted a temporary restraining order requested by the Illinois Retail Merchants Association and several grocers. In a lawsuit against the Cook County Department of Revenue they argue the tax is unconstitutional and vague.

County officials have said the new tax is needed to pay for services and will improve the public's health over time.

Cook County Board President Toni Preckwinkle released a statement Friday saying the county is disappointed in the ruling and will be filing a notice of appeal to vacate the restraining order.

Plaintiff's attorney David Ruskin told Kubasiak during a Thursday hearing that a temporary restraining order was needed because there isn't a system in place for those who would be due a refund if the tax is found unconstitutional. The next hearing on the tax is scheduled for July 12.

Fountain drinks and those in sealed containers would be taxed. Exempt from the tax are sweetened coffee drinks like those made at coffee shops and purchases made with food stamps.

The Illinois Retail Merchants Association had filed a motion for a temporary restraining order and preliminary injunction halting Cook County's rollout of the tax Saturday. The tax would add a penny-per-ounce for sugar and artificially-sweetened drinks. For instance, a two liter bottle of pop would cost an extra 67 cents.

The Merchants Association argued the tax would open up retailers to lawsuits if the tax were ever to be struck down by the courts, and they also argued the tax was unconstitutionally vague and unevenly applied.

"We appreciate the court's decision to hit the pause button on this matter. To implement this tax correctly by the July 1 deadline is inconceivable with rules and regulations that are so poorly defined, vague and continually changing. Without this delay, Cook County retailers would be unfairly exposed to lawsuits for failure to comply and that's a situation we're not willing to accept for our members. We are now asking for the court to rule on a preliminary injunction that will continue the status quo until we have a final decision on the legality of the ordinance," said Rob Karr, the president and CEO of Illinois Retail Merchants Association.

The Illinois Public Health Institute and the Illinois Alliance to Prevent Obesity were disappointed by the delay of the sugary beverage tax stating, "While we are disappointed about this temporary setback, we are confident that the sweetened beverage tax will soon be implemented and our communities will experience the health benefits that come from drinking less sugar. This optional tax will benefit Cook County's fiscal health and our communities' physical health."

WLS-TV contributed to this report.