According to a warning letter from the U.S. Department of Agriculture (USDA), the sugar-sweetened beverage (SSB) tax that took effect in the Chicago metropolitan area on August 2, 2017, violates the federal Food and Nutrition Act, putting Illinois at risk of losing its food-stamp funds.
Some retailers could not update point-of-sale systems to exempt SSB purchases made with Supplemental Nutrition Assistance Program (SNAP) funds before the tax went into effect, so Cook County Department of Revenue officials told retailers they could refund the taxes at a customer service desk or other location on the premises. However, USDA told the Illinois Department of Human Services (IDHS) in an August 7 letter that retailers cannot charge tax to SNAP recipients at any time and that providing an immediate refund does not cure the violation of federal law. USDA also stated that it notified Cook County officials that the workaround was “unacceptable” as early as June 28, although a Cook County spokesperson reportedly said that the county board of commissioners did not know about the objection until it received a memo from IDHS about the August 7 warning letter. Additional details about the Cook County tax appear in Issues 640and 642 of this Update. See Chicago Tribune, August 10, 2017.