USDA Warns Chicago Over Soda Tax

17-Aug-2017 - USA

The U.S. Department of Agriculture (USDA) has warned Chicago over its sugar-sweetened beverage (SSB) tax that took effect in the metropolitan area on August 2. According to the agency, the law violates the federal Food and Nutrition Act, which puts the state of Illinois at risk of losing its food-stamp funds.

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Federal law restricts states from collecting taxes on any SNAP-eligible grocery items. However, Cook County, Illinois, has recently began taxing $0.01 per ounce tax on most sweetened beverages.

"It is FNS's strict interpretation that retailers may not charge the tax to SNAP recipients at any time," Illinois Secretary for Human Services James Dimas wrote in a memo to the Cook County Board of Commissioners. "Providing an immediate subsequent refund at a customer service desk does not cure the problem or the violation of the law."

The Cook County has allowed some retailers to automatically remove the soda tax on SNAP beverages, however, some of the stores are not allowed this privilege. They have to charge the soda tax and then offer SNAP customers an instant refund in the store. (dpa)

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