Today is Tuesday, September 1, 2009, and if you reside in the state of Illinois, today is the day to start paying higher taxes on “sugary sports and energy drinks, certain fruit drinks and some types of candy . . .” As Reuter’s reports, the state with the fifth-largest population in the United States is hoping these higher taxes provides needed revenue for a public works program.According to Reuters, “[n]early three dozen states already charge taxes on sugary foods . . .” Still, some health experts do not believe the higher taxes will do enough to affect consumption of these foods. Illinois currently ranks 10th in the nation “in terms of obese and overweight children . . .” The tax increase is part of an effort to raise funding for a $31 billion public works program. Reuters writes that the entire tax package, in which the food tax increase is a part, is being challenged in court.
Starting today, sugary drinks like those previously described will now be classified as ‘“general merchandise”’ and taxed at a rate of 6.25 percent, which is a relatively dramatic increase from the previous tax rate on these products of 1 percent. Additionally, “[c]andy that does not include flour as an ingredient also will be taxed at the higher state rate and apply to foods ranging from chocolate chips for baking to fruit roll-ups.”
The tax will not be applied at the same rate across the state. In Chicago the “general merchandise” tax is 10.25 percent. Add to this the 3 percent city soft drink tax and the additional 1 percent tax on food and beverages at tourist attractions, and a visitor to the Windy City could find themselves paying a 14.25 percent tax rate on his or her soda.
To read the Reuters story on the Illinois tax click here.
Posted: 09/01/09
