11 Jan 08 Beverage and Retail Industries Seek to Invalidate Tax on Bottled Water In

The beverage and retail
industries took a stand today for their already over-taxed customers by filing
a lawsuit seeking to invalidate the city of Chicago’s new 5-cent-per-bottle
tax on bottled water, which amounts to an astounding 30 percent tax on a case of safe, healthy bottled water.

The first-of-its-kind tax, which took effect Jan. 1, is being paid by Chicago
retailers and ultimately consumers who buy their water in the city of Chicago.
The $10.5 million the city claims it will raise from taxing this healthy
product is earmarked solely for general revenue purposes, not for
environmental purposes.

“We’re going to stand up for our customers, both retailers and consumers who
are being forced to pay a tax on a healthy product like bottled water,” said
Susan Neely, president of the American Beverage Association, which represents
the non-alcoholic beverage industry including bottled water producers. “We’re
not just going to take a tax like this without raising a challenge. It’s
disconcerting that government spending is leading government officials to
start taxing products that are good for you simply to cover their budget
deficits. Like most Americans, we’re confident Chicagoans are tired of being
taxed for every facet of their life, including drinking more water.”

The four plaintiffs in the lawsuit are the American Beverage Association,
Illinois Retail Merchants Association, Illinois Food Retailers Association and
the International Bottled Water Association. The suit was filed in Circuit
Court of Cook County.

David F. Vite, CEO of the Illinois Retail Merchants Association, said Chicago
residents are already leaving the city to avoid its high taxes on products
like gasoline. Vite warns that consumers will migrate to the suburbs for
bottled water and other groceries as well, hurting not just Chicago retailers
but the city’s economy.

“This will affect any Chicago retailer that sells bottled water because people
will shop at grocery stores outside the city,” Vite said. “And they’re going
to buy more than just bottled water at those stores. They’re going to buy all
their groceries there. This tax is just bad business for Chicago and its
consumers.”