Iwan Ries & Co. v. City of Chicago
Annotate this CaseIn 2016, Chicago imposed a municipal tax on units of noncigarette “other tobacco products” purchased in the city. Entities with interests in tobacco products sought injunctive relief, arguing that the ordinance was preempted by the Illinois Municipal Code (65 ILCS 5/8-11-6a). The Illinois Supreme Court ruled in favor of the plaintiffs. Section 8-11-6a contains seven specific exemptions to its otherwise broad restrictions on a home rule unit’s power to tax, allowing those units to impose certain taxes on alcoholic beverages, cigarettes, or other tobacco products; motel or hotel rooms; sale or transfer of real property; lease receipts; food prepared for immediate consumption and alcohol sold by businesses that make food for immediate consumption on-site; and other taxes not based on the selling or purchase price or gross receipts from the use, sale, or purchase of tangible personal property. The tobacco products exemption refers to “a tax based on the number of units of cigarettes or tobacco products (provided, however, that a home rule municipality that has not imposed a tax based on the number of units of cigarettes or tobacco products before July 1, 1993, shall not impose such a tax after that date).” The statute allows only those municipal taxes on cigarettes or other tobacco products enacted prior to July 1, 1993. The city’s public policy arguments are better directed to the General Assembly, which has rejected prior requests to amend the statute.
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