Illinois First District Appellate Court Strikes Down Tax Increase on Candy, Soft Drinks, and Grooming and Hygiene Products

On February 1, 2011, the Supreme Court of Illinois (“Supreme Court”) granted the state’s motion for a stay of enforcement of the January 26, 2011 decision in Wirtz v. Quinn.

In Wirtz v. Quinn, the Illinois First District Appellate Court (“Court”) struck down Illinois Public Act 96-34 (“Act”). According to the Court, the Act violated the single subject rule of the Illinois Constitution because not all of the Act’s provisions “have a natural and logical connection to the single subject of revenue.”

Among other things, this Act increased the sales tax rate, effective September 1, 2009, on soft drinks, candy, and grooming and hygiene products, and increased the tax due on alcoholic beverages, wine, and beer. Soft drinks, candy, and grooming and hygiene products are now subject to the higher general merchandise state rate of 6.25%, not the lower 1% rate imposed on food and medicine. Further, the Act almost doubled the tax on alcoholic beverages, wine, and beer.

Because Wirtz v. Quinn has been stayed, pending further action by the Supreme Court, the Illinois Department of Revenue advises retailers and liquor manufacturers or distributors to continue to remit tax in the same manner as they have since September of 2009.