For a few, Cook County beverage tax is a piece of cake
Daria Reid has always known where her bread is buttered.
The owner of the Cake Planet Bakery in East Chicago, Indiana, has never sold soda at her establishment, and given all the recent changes to the way the local industry is policed, she’s glad.
“It will have no impact on me,” Reid told the East Central Reporter of the penny-per-ounce beverage tax that went into effect on Aug. 2 in Cook County. “I’m glad I won’t have to deal with the headache.”
The tax formally went into effect roughly a month late following a temporary injunction brought about by a lawsuit claiming the tax was unconstitutional. Although the lawsuit was dismissed, it remains alive in the appeals process.
Reid said the added cost could change business for many.
“With the new taxes, for people that sell soda I can see people not buying,” Reid said.
Philadelphia enacted a 1.5 cent-per-ounce tax that has wreaked havoc on many on the city’s small retailers. The popular CC Orlando & Sons bakery shuttered its doors after nearly 70 years of service, with the grandson of the bakery’s founder telling Philly.com that “the soda tax was the kill shot.”
Some estimates show Philadelphia business off by as much as 60 percent, as consumers have taken to driving out of the city to buy their soda and other drinks. Collectively, Coca-Cola and Pepsi Co. have laid off at least 120 city workers since the tax took effect.
In Cook County, the tax comes on the heels of the county raising sales taxes by 1 percent, to 10.25 percent, at the start of the year, more than 3 percentage points higher than in neighboring Indiana.
The Chicago Tribune reported that Dave Ryan, executive director of the Lake Shore Chamber of Commerce, said he pities merchants still making their retail purchases in Illinois. The Tribune added that the new beverage tax is expected to generate approximately $42 million over the first three months and just over $200 million in one year.