Tax & Accounting Blog

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

Indirect Tax, ONESOURCE, Sales and Use Tax November 1, 2011

The Supreme Court of Illinois has reversed Wirtz v. Quinn, an Illinois First District Appellate Court decision which declared the increased tax rate on alcohol, candy, soft drinks, and grooming and hygiene products to be unconstitutional because Public Act 96-35 violated the state’s “one subject” requirement. Public Act 96-35 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 Illinois Department of Revenue had previously instructed sellers to continue collecting the increased tax while waiting for a Supreme Court decision so the decision should not change the amount of tax Illinois retailers are collecting on sales of the aforementioned items.