Sellers' questions show 'soda tax' confusion
Retailers and restaurants have many questions about how to handle Cook County's new sweetened beverage tax, as shown in these excerpts from the county's online Q and A.
Q. How do we effectively market our products when customers can purchase them from another county for less?
A. This is a business decision on which the department cannot provide advice.
Q. Should 16.9 ounces be taxed at 16 ounces or 17 ounces?
A. The ordinance states that the rate of tax is $0.01 per ounce. Accordingly, only full ounces should be taxed. In determining how a distributor would charge taxes on large quantities of items, tax should be charged based on the amount that will be sold at retail. For example, if a distributor delivers a case of 16.9 oz bottles that will be sold individually, the tax should be charged on each individual bottle ($0.16 per bottle). If they will be sold as a 6-pack of 16.9 oz bottles, the total number of ounces should be calculated before rounding to determine tax (16.9 oz x 6 bottles = 101.4 oz -- tax is $1.01).
Q. Will mixers produced to be mixed with alcohol be taxed?
A. If the mixer itself meets the definition of sweetened beverage in the ordinance, it is subject to tax. This includes soda that is added to drinks (i.e. Coke, Pepsi, Sprite, ginger ale, etc.). The tax should be charged for the number of ounces of that sweetened beverage that are added to an alcoholic beverage.
Q. If retailers do not follow the manufacturer's instruction on syrup mixing, how do they calculate the tax?
A. Per the ordinance, this must be calculated for tax purposes using the manufacturer's instructions.
Q. How should the tax be imposed when the retailer offers unlimited refills and does not know if a customer gets no refills or multiple refills?
A. The ordinance requires the tax to be applied to each ounce sold. The retailer has the discretion to offer refills, but must assure tax is remitted per ounce sold. If a 20 ounce beverage is sold, the tax is $0.20. The addition of ice is at the discretion of the retailer/customer. If the business uses cups with an ice fill line, where they have already determined the number of ounces that fill the cup, the business can submit that information to the Department as proof of the number of ounces sold.