CHICAGO The American Beverage Association, the International Bottled Water Association, the Illinois Retail Merchants Association and the Illinois Food Retailers Association plan to file a lawsuit challenging Chicago’s bottled-water tax, which took effect Tuesday.
The alliance of food and beverage retailer associations has long argued against the tax, which levies a 5 cent surcharge on every bottle of water bought in Chicago. The tax adds about 30 percent to the overall cost of a case of bottled water. Bottled-water retailers and manufacturers argue the tax is simply a thinly veiled money grab that will only drive shoppers and businesses out of the city.
“People are already leaving the city when it comes to gas, alcohol and cigarettes,” said Dave Vite, chief executive officers of the IRMA, a co-plaintiff in the expected lawsuit. “This will affect anybody that sells bottled water, because when customers do migrate, they take other business with them.”
On the other side of the debate, proponents of the tax have argued the tax will encourage water drinkers to forgo plastic water bottles in favor of tap water, as well as generate an estimated $10.5 million in tax revenues annually. The tax was approved by the city council in the fall as the first of its kind in the nation.
The associations will be represented by Jenner & Block in a suit expected to be filed in early January in Cook County Circuit Court, claiming the tax is illegal based on existing statutes that prohibit the state from singling out a specific food product with a specialized tax. “State law prohibits the City of Chicago from imposing a tax on a single product, like they have done with this bottled water tax,” Illinois Beverage Association Executive Director Tim Bramlet said.