Illinois Supreme Court Upholds Product-Specific Tax Hikes

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Illinois Supreme Court Upholds Product-Specific Tax Hikes

10/14/2011

CHICAGO -- The Supreme Court of Illinois reversed a First District Appellate Court decision and upheld the state's right to charge a higher tax rate on alcohol, soft drinks, candy, and grooming and hygiene products, according to a news release. Retailers in the state will not see much change, though, since the Illinois Department of Revenue collected the increased rate while the case was still under review.

Public Act 96-35 took effect Sept. 1, 2009, and included a tax increase from 1 percent to 6.25 percent on certain products, and nearly doubled the tax on wine, beer and other alcoholic beverages. The case, Wirtz v. Quinn, questioned whether the act violated the state's "one subject" requirement.

The Appellate Court had previously found that the act's single subject was "revenue," due to its title. But the state Supreme Court overruled that decision, stating the act's single subject was "capital projects" and noting the word "subject" may be as broadly as the legislature chooses. The court also found the act's provisions had a "natural and logical connection" to the subject of the legislation and upheld the constitutionality of the act itself, according to the news release.