Illinois Supreme Court Sides With Walgreens Over Improper Bottled Water Tax

Jun 20, 2019

The Illinois Supreme Court is letting Walgreens off the hook for improperly collecting a tax on sparkling water.

Soft drinks are supposed to be exempt from Chicago’s 5¢ bottled water tax, but Walgreens was collecting it on sparkling water.

The nickel was itemized on the receipt, and the money was sent to the city.

All that stopped after media reports called out the practice. But a class action lawsuit accused the company of fraud.

When the case was argued before the Supreme Court earlier this year, Walgreens lawyer David Salmons told the justices there was no fraud — just a mistake.

“There is in fact nothing deceitful about providing plaintiff with a receipt that accurately reflected what Walgreens was doing with the plaintiffs’ money,” he said.

In a 6-1 decision, the court agreed — saying when taxes are paid voluntarily, there are no take-backs.

But plaintiffs’ lawyer Todd McLawhorn warned that such an outcome would put too much of a burden on shoppers.

“Consumers would have to be on super-hyper alert,” McLawhorn told the justices. “Every consumer transaction would have to be challenged at the point of sale for the plaintiff to ever maintain a fraud case.”

That, however, is just what the majority said customers should do: object while standing at the cash register, before handing over the money.

The case is McIntosh v. Walgreens, No. 2019 IL 123626. The court has posted the opinion, briefs, and oral argument audio and video on its website.