Retailers File Temporary Restraining Order and Preliminary Injunction to Block Cook County’s Sweetened Beverage Tax

June 27, 2017


Ryan McLaughlin, 312-969-0255

Retailers File Temporary Restraining Order and Preliminary Injunction to Block Cook County’s Sweetened Beverage Tax

Vague regulations and policy’s lack of uniformity violate the state’s constitution

SPRINGFIELD – Today, the Illinois Retail Merchants Association, on behalf of Cook County retailers, filed a temporary restraining order and is seeking a preliminary injunction in the Cook County Circuit Court challenging the sweetened beverage tax saying it violates the uniformity clause of the Illinois Constitution and is impermissibly vague. The ordinance is designed to place a penny-per-ounce tax on sweetened beverages and is poised to go into effect in only a matter of days on Saturday, July 1st. The lawsuit was filed by the law firm of Horwood Marcus & Berk who specialize in state and local tax as well as business and finance law.

The sweetened beverage tax creates classifications of taxable sweetened beverages that violate the uniformity clause of the state’s constitution, which requires taxing bodies to draw reasonable classes of taxable categories and imposes a uniform tax within the classes. Specifically, the ordinance taxes ready-to-drink, pre-made sweetened beverages, but generally excludes sweetened beverages made on demand. Not only are these sweetened beverages the same other than how they are served, but when considering the purpose of the ordinance, to promote public health and decrease obesity rates, the classification bears no reasonable relationship to accomplishing those goals. The argument can be made that Cook County has failed to meet the minimum standards in creating classes of taxable sweetened beverages.

Example of a violation of the uniformity clause:
A ready-to-drink sweetened iced tea served out of a chilled beverage urn is taxable, but a sweetened iced tea that is shaken behind the counter before giving it to the customer is not taxable. The beverages are substantially similar, except for the “shake” before giving it to the customer.

Additionally, the ordinance is impermissibly vague and fails to provide precise application under the circumstances it is intended to operate, creating a burden on retailers to accurately calculate the proper amount of tax.

Example of vagueness in the ordinance:
A retailer is responsible for collecting the Sweetened Beverage Tax for fountain sodas based on the amount it will sell in a certain-sized cup. In practice, however, by adding ice, the retailer is actually serving less sweetened beverage than the tax which was collected from the customer. A similar problem is possible in the refill context when the tax could be under-collected based on additional ounces consumed, with either scenario leaving the retailer legally exposed in an untenable situation.

Causing further complication, there has been an unavailability of guidance on the issue with the County changing the rules just days before the tax goes into effect making it impossible for retailers to properly implement in such quick order.

Ever-changing rules for SNAP may result in retailers being pushed out of program
SNAP does not allow a state or local unit of government to collect local sales taxes on purchases made under this program. Many retailers may not be able to correctly charge the Sweetened Beverage Tax, especially since the rules have been changed approximately two weeks prior to the date retailers must begin collecting the tax. If retailers do not comply they might be in jeopardy violating the terms of their SNAP contracts. In some cases, SNAP represents a significant portion of their business.

“As it stands, 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. To implement this tax correctly by the July 1 deadline is inconceivable with rules and regulations that are so poorly defined and continually changing. If enacted, 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 the retailers in Cook County,” said Rob Karr, president and CEO of IRMA.

Retailers are urging the court to block implementation of the ordinance due to the lack of clarity in how to properly apply and administer the tax and its unequal application.


About the Illinois Retail Merchants Association (IRMA)
One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 20,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.
About Horwood, Marcus & Berk
Horwood Marcus & Berk is a Chicago law firm that represents a wide range of clients from Fortune 500 corporations, to mid-sized and closely-held companies. While serving a number of different industries, the firm is specializing in state and local tax as well as business and finance law. In recent years, the firm has fought on the side of retailers in Qui tam lawsuits, which whistleblowers have used to unfairly target companies under the False Claims Act.

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Special Correspondent and Analyst for ABC News
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Updated WMS 11/15

Darvin Furniture as Retailer of the Year


September 12, 2016

CONTACT:   Rachel Peabody, 217-753-1761


 Illinois Retail Merchants Association honors Darvin Furniture as Retailer of the Year


CHICAGO—The Illinois Retailers Merchants Association is proud to announce that Darvin Furniture is the 2016 Illinois Retailer of the Year. Darvin, a third-generation family-owned furniture store in Orland Park, was selected for the award due to their success in the industry, their innovation meeting consumer desires and their dedication to the community and employees that they serve.

Continue reading “Darvin Furniture as Retailer of the Year”

Illinois Retailers Oppose Funded Paid Sick Leave



  April 3, 2016                                                                                                        CONTACT

                                                                                                                                                                                       Ryan McLaughlin, 312-969-0255



Chicago employers reeling from two years of consistent mandates and tax increases from City Hall

CHICAGO – Illinois Retail Merchants Association (IRMA) and the Chicagoland Chamber of Commerce have issued the following statement regarding Mayor Rahm Emanuel’s “Working Families Working Group” recommendations:

“Businesses are at a tipping point and these proposals will only exacerbate the problems facing employees looking for more hours and higher wages. We cannot provide the jobs, pay the wages and invest in local communities while City Hall layers on one cost after another and chases sales out of the City. These policies will not result in more jobs being created or higher wages – just the opposite. City Hall needs to remember that the overwhelming majority of Chicago’s business owners are working families too,” said Rob Karr, president/CEO, Illinois Retail Merchants Association.

“Young people looking for first jobs to gain valuable experience in the workforce are some of the unintended casualties of these types of unaffordable mandates. Teen unemployment will absolutely worsen when employers have fewer dollars to budget for salaries. UIC’s Great Cities Institute published a recent report detailing extraordinarily high levels of unemployment in minority communities: 88 percent of African Americans and 85 percent of Latinos ages 16-19 years old were jobless in 2014. Arbitrary regulations imposed on businesses are one of the causes for this lack of opportunity,” said Theresa E. Mintle, president/CEO of the Chicagoland Chamber of Commerce.

In conjunction with the release of the working group’s skewed report, IRMA and the Chicagoland Chamber of Commerce have released findings from actual job creators who represent businesses that operate every day. The report titled “The Dissent: The Business Perspective on the Effects of Another Mandate on Employers”states the cumulative effect of 14 months of government mandates will not help people get back to work and only continues to weaken Chicago’s economic future. Specifically, the dissenting opinion piece highlights:

    • Employers will respond to a Chicago-only paid sick leave mandate by increasing prices, decreasing employee benefits and hours, limiting expansion, possible cuts to labor, more extensive use of technology, and likely reductions in employee headcounts over time.
    • Communities already suffering from lack of development will see their challenges increase as labor mandates continue, and businesses on the City borders will face further and very real competition from neighboring jurisdictions that offer lower taxes, higher incentives, and no costly labor mandates.
    • The consequences of higher labor costs will adversely impact employers, employees, and all consumers.
    • The Chicagoland Chamber and IRMA disagree with the notion that paid sick leave has a minimal impact. Everything has a cost, and the cost of a Chicago-only paid sick leave mandate is added onto the growing list of government intrusion into business operations.
    • Instead of continuing to intrude with ill-conceived labor policies, focusing and investing in training workers and the unemployed to compete for the higher paying jobs of today and the future is the single best way to achieve the goals of the working group.


IRMA and the Chamber also cite examples of City Hall mandates impacting hiring and business sustainability:

    • City of Chicago-only $588 million property tax increase that disproportionately burdens the business community. Employers will not receive assistance or tax breaks. In fact, the Mayor is seeking to advance legislation in Springfield to exempt many homeowners from the increase which would place even more of the burden on the employer community.
    • City of Chicago-only starting wage ordinance, which increased labor costs for employers to $13 per hour for each employee by 2019.
    • Cook County sales tax increase that took effect January 1 and increases the rate from .75 percent to 1.75 percent. This increases Chicago’s total sales tax from 9.25 percent to 10.25 percent (and higher in the McPier District), earning Chicago the title of the highest sales tax rate in the nation.
    • City of Chicago-only plastic bag “ban” ordinance. The ban took effect in August 2015 and has been a significant cost to retailers.
    • City of Chicago-only ban on the sale of flavored tobacco products (including menthol) within 500 feet of a school resulting in lost sales with no measureable benefit.


To read the entire dissenting opinion from IRMA and the Chamber, please click here.

About the Illinois Retail Merchants Association

One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 23,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.

About the Chicagoland Chamber of Commerce

The Chicagoland Chamber of Commerce represents over 1,000 member companies, their 400,000 employees, and over $24 billion in revenue. We combine the power of our membership with our legacy of leadership and business advocacy to drive a dynamic economy. We focus on delivering value for our members, making

Chicagoland a world-class place to live and work. Visit Chicagoland



Tanya Triche, IRMA’s General Counsel speaks at the Chicago’s Proposal to Mandate Minimum Prices on Tobacco Products Press Conference



CONTACT:  Matt Butterfield, 312-545-5058


Convergence of increased tobacco taxes, sales taxes and property taxes driving
businesses to the breaking point


CHICAGO—Dozens of neighborhood small business owners are opposing the City of Chicago’s unprecedented overreach into the free market in Illinois by proposing to mandate the minimum price of tobacco products, paired with an effort to raise another $6 million through additional taxes on cigars and smokeless tobacco as well as increase the age to purchase from 18 to 21. Under the mandate, all brands of cigarettes would be priced at a minimum of $11.50, plus making them ineligible for coupons or promotional specials.

“Where will this stop?” asked Rob Karr, president and CEO of IRMA. “Do consumers really want city government setting minimum prices for products? Do they really want city government taking away coupons? Chicago already has the highest tobacco taxes and the highest sales taxes in the nation, and amazingly, they still want more. Plus we’re on the heels of the historic property tax increase they just imposed. There is a breaking point, and local business owners tell IRMA again and again they will not survive in the city.”

“We need our police officers focusing on violent crime in our community, not on low-level offenses created by misguided tax policies,” said Alderman Jason Ervin. “I urge my colleagues to consider examples like New York state where 57 percent of cigarettes are purchased unstamped on the black market due to high prices caused by significant taxes. Chicago is experiencing the same trajectory now and the ordinance before us substitutes yet another tax increase for the real solution of education, job training, and creating opportunities.”

Pastor Roosevelt Watkins III, of Bethlehem Star M.B. Church, added, “The mayor’s current proposal would have a negative ripple effect that would increase gang crime, further aggravate police and community relations, and strip opportunity from struggling young people with tremendous odds already stacked against them. Until we can stop driving employers out of the neighborhoods, people will continue to be impacted by the high unemployment rate and a worsening crime problem on our streets. Chicago cannot afford to cement its underprivileged to a permanent underclass.”

“I understand that the city is searching for revenue to keep-up with spending, but tobacco products have been unfairly targeted,” said Jim Bayci, a 7-Eleven franchisee in the Loop. “Beyond having the highest tobacco tax in the nation, Chicago banned the sale of menthol cigarettes in many neighborhood stores, electronic vaping products were recently attacked with the highest rates in the country, and now the City Council is considering minimum prices and massive taxes to the remaining products such as cigars and smokeless tobacco. When I lose tobacco customers to bordering communities, I also lose the associated sale of beverages, snacks and other items. It’s a huge hit to 7-Eleven franchise owners across the city.”

Tanya Triche, general counsel for IRMA, says it’s not all about taxes, and she’s equally concerned by the precedent of minimum pricing. “Having the city mandate minimum prices while banning any specials, discounts and coupons is a slippery slope. Anyone can see how this is just a start—the city could eventually take away coupons and other discounts for products they deem unhealthy such as soda, snacks, or certain kinds of milk and bread. Consumers should be justifiably concerned.”

About the Illinois Retail Merchants Association
One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 23,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the state, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.

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