Cook County repeals sweetened beverage tax—Effective December 1, 2017
Multistate Tax alert | November 28, 2017
This tax alert provides some background on the sweetened beverage tax, its repeal, and certain retailer and distributor considerations.
- Levy of the sweetened beverage tax—effective July 1, 2017
- Repeal of the sweetened beverage tax—effective December 1, 2017
- Retailer and distributor considerations
On October 11, 2017, the Illinois Cook County Board of Commissioners repealed the sweetened beverage tax ordinance, effective December 1, 2017. The sweetened beverage tax, which was first levied effective July 1, 2017, must continue to be paid, collected, and enforced through November 30, 2017.
Levy of the sweetened beverage tax—effective July 1, 2017
On November 10 of last year, the Illinois Cook County Board of Commissioners passed Ordinance 16-5931, enacting the “sweetened beverage tax,”1 a $0.01 per ounce tax imposed on the retail sale of all sweetened beverages in Cook County.2
This tax became effective on July 1, 2017, and was imposed on any non-alcoholic beverage, carbonated or non-carbonated, intended for human consumption, containing any caloric sweetener or non-caloric sweetener, and available for sale in a bottle or produced for sale through the use of syrup and/or powder.3
Repeal of the sweetened beverage tax—effective December 1, 2017
On October 10, 2017, Ordinance 17-4704 repealing the sweetened beverage tax was approved by an almost unanimous vote of the Cook County Finance Board (15–1), and officially confirmed by the Cook County Board of Commissioners on October 11, 2017.4 The sweetened beverage tax must be paid, collected, and enforced through November 30, 2017, and the last return/tax payment will be due December 20th, 2017.
Retailer and distributor considerations
Cook County has acknowledged that on December 1, 2017, retailers may have unsold inventory on hand upon which the sweetened beverage tax was paid. The county has posted a “Close-Out Process” document on its website regarding the refund process to be followed by the distributors and retailers who might have taxed inventory on hand as of December 1, 2017.5
Instructions provided by the county on its website, direct retailers to request refunds from the distributor to whom the sweetened beverage tax was originally paid. The county instructs distributors to obtain sufficient documentation from the retailers to support the refund claims. After the distributors provide the refunds/credit to the retailers, the distributors can either take a credit on their final return or can apply for a refund from Cook County.
If you have questions regarding Ordinance 17-4704 or other Chicago or Illinois tax matters, please contact any of the following Deloitte Tax professionals:
Dominic Greco, managing director, Deloitte Tax LLP, Chicago, +1 312 486 9271
Mary Pat Kohberger, managing director, Deloitte Tax LLP, Chicago, +1 312 486 3825
Anna Marie Alberti Hearn, senior manager, Deloitte Tax LLP, Chicago, +1 312 486 2754
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1 Cook County Ordinance No. 16-5931, enacted Nov. 10, 2016.
2 Illinois Code of Ordinances § 74-852(a).
4 Cook County Ordinance No. 17-4704, enacted Oct. 11, 2017, available here.
5 Cook County sweetened beverage tax, Cook County Government (last visited 11/27/17).
State tax legislative, judicial, and administrative developments