Retail Merchants Association Files Soda Tax Appeal

CHICAGO (CBS) — The drink tax plot thickened late Tuesday afternoon, as retailers in Illinois filed an appeal to stop the sweetened beverage tax from taking effect.

But seeing as it’s supposed to be implemented in less than seven hours, what’s going to happen next remains unclear.

CBS 2’s Vince Gerasole visited some restaurants, who are struggling to figure out what to do with all the uncertainty.

“How am I going to regulate it? How much am I going to charge?” questioned George Lemperis, owner of the Palace Grill.

Most restaurateurs are paying the penny-an-ounce tax directly to their suppliers. But how much should they pass along to customers? They still aren’t sure.

“This drink already right now is $2.50,” Lemperis said, referring to a soda. “It’s going to be almost $3 bucks for a drink. You’re going to pay $3 bucks for this now? I don’t know.”

Adding to the confusion, they will also be required to pay tax on product they’ve already purchased if it’s served after Tuesday.

“Even though I’ve already bought it, I have to mail in the money and pay the tax on this product that I already have,” said Lemperis.

At Chicken Planet in the Loop, pop has been a bargain at $1 per glass with free refills. They, too, are struggling with what to charge.

“I have to lose money to keep the customer happy,” said Abid Moinuddin.

For a $75 box of soda mix, they will now pay $35 more in taxes.

“It’s not going to be free refill anymore. I have to put a sign on the machine — the refill will be 50 cents or 75 cents,”  Moinuddin said.

Sam Toia with the Illinois Restaurant Association says the confusion is one more reason he and retailers hope to file another appeal.

“Everyone is scrambling how to figure this out,” Toia said, adding that he is not overly optimistic about an appeal, but says he is going to try.

The county hopes to pocket $200 million annually from the tax.

“They’re killing the small businesses; they are killing the restaurant people,” Lemperis said.

“We have filed a notice to appeal the decision on the sweetened beverage tax to protect retailers and consumers against this tax whose rules and regulations have continuously evolved throughout this process,” Rob Karr, president and CEO of the Illinois Retail Merchants Association, said in a statement

Here’s another complication for restaurants: if they sell a mixed drink, such as a rum and coke, they can’t charge the tax on the alcohol, but they can on the soda. So, how do they decide on a price? And that late breaking word of the Illinois Retail Merchants Association filling an appeal just creates more questions.

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