CHICAGO (AP) — The U.S. Department of Agriculture is threatening to withhold $87 million in food stamp funds if Cook County doesn’t alter the manner in which the penny-an-ounce tax on sweetened beverages has been implemented.
Cook County officials told retailers that purchases made with food stamp benefits are exempt from the soda tax under federal law. However, it allows retailers to tax those purchases and provide refunds as a workaround for stores that haven’t been able to properly update their point-of-sale systems.
The Agriculture Department objected to how the tax is applied to purchases using food stamps. It says the county must take “immediate steps” to become compliant, adding no taxes can be collected until the problem is solved.
A spokesman for Cook County Board President Toni Preckwinkle says county officials have received the federals concerns and county lawyers are reviewing it.