Cook County has dropped its bid to force a group of area grocers and the Illinois Retail Merchants Association to hand over $17 million for bringing a failed legal challenge to the county’s so-called “pop tax.”
On Tuesday, Aug. 8, Frank Shuftan, spokesman for Cook County Board President Toni Preckwinkle, confirmed attorneys for the county had withdrawn the petition before Cook County Circuit Judge Daniel Kubasiak to recover what county officials alleged was millions of dollars in tax revenue lost while the court handled the retailers’ legal challenge.
“It was always our intention to protect the revenue that finances the county’s critical public health and public safety services,” Shuftan said in a prepared statement. “Now that the Appellate Court has rejected the emergency motion that would again prevent us from collecting the sweetened beverage tax, we believe we should move forward cooperatively and in good faith with the county’s retail industry. As a result, the county has determined that withdrawing its petition for damages would serve the public interest.”
Earlier this year, the Cook County Board of Commissioners, at Preckwinkle’s urging, enacted an ordinance slapping a one-cent-per-ounce tax on a variety of sweetened drinks sold at supermarkets, convenience stores, restaurants and other retail locations throughout the county. County officials said they believed the tax would generate as much as $200 million in additional tax revenue for the county, and they professed a belief the tax would also reduce consumption of the sweetened drinks, improving public health.
The tax was scheduled to take effect on July 1, but was delayed when a group of grocers and IRMA sued to block the tax, alleging it was unconstitutional and illegal. Among other allegations, the retailers said they believed the ordinance was poorly written, leaving businesses attempting to collect the tax at grave risk of running afoul of federal food stamp rules and of being sued, in addition to potentially being fined by the county for not collecting the proper amount of taxes.
The judge initially indicated the retailers could have legitimate beefs, and imposed a temporary restraining order, which remained in place until July 28. While the county prevailed in court, county attorneys three days later told Judge Kubasiak they also intended to sue the retailers for the $17 million in revenue they estimated the county lost while the court order restrained collection of the tax.
In response, the judge said he found the suggestion “chilling” and “unprecedented,” and said he doubted the county could present sufficient examples in which government agencies had successfully sued taxpayers for challenging a tax in court and delaying its implementation. He had given the county’s lawyers until Aug. 15 to flesh out their claims in a memorandum in support of their petition.
The county never filed the document, instead withdrawing the petition.
In a statement following the county’s announcement, Rob Karr, IRMA’s president and CEO, said the county’s countersuit threat “displayed a dangerous disdain for legal rights we all enjoy.”
“We look forward to the Preckwinkle Administration beginning to exercise cooperation and good faith with the county's retail industry,” Karr said.