News and Insights

Illinois Supreme Court Upholds Tax Increases on Alcohol, Candy, Soft Drinks, and Grooming Products

Tax Development Oct 13, 2011

The Supreme Court of Illinois (“Supreme Court”) reversed Wirtz v. Quinn (“Wirtz”), an Illinois First District Appellate Court (“Appellate Court”) decision, and upheld the state’s increased tax rate on alcohol, candy, soft drinks, and grooming and hygiene products. The decision should not change the amount of tax Illinois retailers collect on sales of candy, soft drinks, etc., as the Illinois Department of Revenue (“Department”) instructed sellers to collect the increased tax while waiting for a Supreme Court decision.

Wirtz involved whether Public Act 96-35 (“Act”) violated the state’s “one subject” requirement. The Act, which originally went into effect September 1, 2009, implemented numerous tax changes, including an increase in the sales and use tax rate from 1% to 6.25% on soft drinks, candy, and grooming and hygiene products. In addition, the Act almost doubled the tax due on alcoholic beverages, wine, and beer.

In its opinion, the Supreme Court overruled the Appellate Court and held the Act to be constitutional. The Supreme Court noted that the word “subject” may be as broad as the Legislature chooses and should be construed liberally in favor of upholding the legislation. The Appellate Court had previously held that the single subject of the Act was “revenue,” due to its official title “an act concerning revenue.” However, the Supreme Court disagreed, concluding that the single subject of the Act was in fact “capital projects.” The Supreme Court further held that not only was “capital projects” a legitimate subject, but the provisions within the Act had a “natural and logical connection” to the subject of the legislation. Thus, the Supreme Court upheld the constitutionality of the Act, and the increased tax rates on alcohol, candy, soft drinks, and grooming and hygiene products remain in effect.


Jim Kranjc