Industry Groups File Lawsuit Opposing Chicago's New Bottled Water Tax

The Chicago City Council approved the bottled water tax in November as part of a package of fees, fines and taxes to help shore up the city's budget. That included an $86 million property tax increase.

CHICAGO (AP) -- Industry groups filed a lawsuit Friday opposing Chicago's new tax on bottled water -- one of the first of such taxes in a major U.S. city -- arguing the surcharge is unconstitutional and harms city businesses.

Several beverage and retail associations filed the lawsuit in Circuit Court of Cook County just days after the 5-cents-a-bottle tax took effect on Jan. 1, asking the court to declare the tax invalid.

"We're not just going to take a tax like this without raising a challenge," said Susan Neely of the Washington, D.C.-based American Beverage Association, one of four plaintiffs named in the lawsuit.

Proponents say taxing plastic bottles will encourage people to drink tap water, reducing non-biodegradable waste that damages the environment. The city also has estimated the tax will raise more than $10 million.

But the lawsuit alleges the tax unlawfully targets one product, violating a uniformity clause in the state constitution. The tax also raises the price of a case of bottled water by around 30 percent, and plaintiffs claim that will drive grocery shoppers to the suburbs.

"And they're going to buy more than just bottled water at those stores. They're going to buy all their groceries there," said David Vite of Illinois Retail Merchants Association, another plaintiff.

The two other plaintiffs are the Illinois Food Retailers Association and the International Bottled Water Association.

The city of Chicago's law department hadn't seen the lawsuit by Friday afternoon, but a spokeswoman expressed confidence the bottled water tax is constitutional.

"We think the tax is legal and we are prepared to defend it in court," Jennifer Hoyle said.

Bottled water sales have soared from 18.8 gallons a year per person in 2001 to 28.3 gallons per person five years later, according to the Beverage Marketing Corporation.