Tax & Accounting Blog

Illinois: Appellate Court Voids Law Affecting Sales Tax

Indirect Tax, Sales and Use Tax February 7, 2011

On January 26th the First District Appellate Court of Illinois ruled that a law that raised liquor taxes and changed the sales tax treatment for candy, soft drinks, and personal hygiene and grooming products is void due to constitutional issues. Plaintiffs in the case had argued, and the Court agreed, that a number of Public Acts approved by the Illinois General Assembly in 2009 are unconstitutional because they violated the single-subject rule of the Illinois Constitution.

One of these, Public Act 96-34, was titled “An Act concerning revenue,” and it contained a number of different provisions affecting taxes including increasing the sales tax on candy, certain beverages, and grooming and hygiene products.

The Illinois Supreme Court has issued a stay of this ruling pending appeal. Until that occurs the State says that retailers should continue to administer the tax laws as they have since September of 2009.

The Court’s decision is available here:
Updates will be posted on the Revenue Department’s website: