Cook County officials claim resolution of food stamp soda tax problems
Retailers will now have to either program cash registers not to tax purchases made with food stamps, or implement a “manual override.”
Cook County officials claim they’ve found a solution to the sweetened beverage tax’s violation of federal regulations regarding food stamps, according to the Chicago Tribune.
When the tax went into effect Aug. 2, Cook County exempted those receiving Supplemental Nutrition Assistance Program, or SNAP, benefits, commonly referred to as food stamps. The county allowed retailers to give tax refunds to SNAP recipients who purchased sweetened beverages if those retailers’ systems were not set up to avoid charging it at the point of sale.
But the U.S. Department of Agriculture’s Food and Nutrition Service, or FNS, which runs SNAP, notified the Illinois Department of Human Services, or DHS, that applying Cook County’s soda tax to SNAP purchases violates federal regulations, and that it is impermissible for retailers to charge the tax to SNAP recipients at the point of sale, and then offer refunds to compensate. FNS warned the state that if Cook County did not change this provision, the federal agency would work to suspend administrative funding to Illinois, worth nearly $87 million. DHS told Cook County about FNS’s warning in an Aug. 10 letter.
Cook County Director of Revenue Zahra Ali wrote a letter to DHS informing officials that the county was unaware its regulations violated federal law, according to the Chicago Tribune. The Tribune explains Cook County has revised the rules to prohibit retailers from offering tax refunds to SNAP recipients after purchases of sweetened beverages. Retailers will now have to either program their cash register systems to automatically not tax SNAP purchases on sweetened beverages, or provide a “manual override” to prevent the tax from being charged.
Cook County’s “soda tax” has been plagued with rollout problems for both retailers and consumers. Both 7-Eleven and Walgreens have been sued over allegations they improperly taxed consumers. McDonald’s faced a similar lawsuit, but the plaintiff later agreed to the case’s dismissal.
Polling commissioned by the Illinois Manufacturers’ Association shows the tax is wildly unpopular, with 87 percent of likely Cook County voters surveyed opposing it.
The tax has also taken a toll on Cook County President Toni Preckwinkle’s popularity. Preckwinkle cast the tie-breaking vote in favor of the tax in November 2016 and has since defended it as a necessary revenue-raising measure. An Aug. 15 poll from We Ask America shows Preckwinkle’s approval rating at a mere 21.12 percent, while her disapproval rating is 67.98 percent.
Respondents were asked in the same We Ask America poll, “Does that fact that Toni Preckwinkle cast the deciding vote that created the Cook County beverage tax
make you more likely or less likely to vote to re-elect her?”
Only 10 percent of respondents said the tax made them more likely to vote for her, while 84.49 percent of respondents said the tax made it less likely they’d cast their ballot for Preckwinkle.