United States
Department at
Agriculture

Food and

Nutrition

Service

Mame-st Flo-gum

?17 West Jackson 

E?Oth Floor
Clucogo. tL 506m

SDA

-



Airgun}: 2312'

Mr. James T. Dimas

Stz-crotar}t

Department of Human Services
401 South Clinton Street

Chicago. Illinois 60807

Dear Secretary Dimas;

The Food and Nutrition Service (FNS) is formally notifying you that the
August 2. 2017. implementation of the Cook County Sweetened Beverage
Tax is in violation of the Food and Nutrition Act.

On November 10. 2016. the Cook County Board of Commissioners passed the
Cook County Sweetened Beverage. Tax Ordinance and provided that this tax
would not apply to purchases that are speci?cally exempt from taxation under
Federal law (to. SNAP),

Subsequently. Cook County changed the manner in which retailers could
charge the Sweetened Beverage tax. Initially retailers were advised to include
the tax in the shelf price of the effected beverages. On June 6. 2017. retailers
were advised that altematively. they could add the tax at the point-oh sale.

With the implementation date for tax collection approaching. Cook County
advised retailers unable to modify their point-of?sale systems in time for the
tax implementation date that one interim option was to refund the tax charged
on SNAP purchases after collecting it. The Food and Nutrition Act prohibits
state or local sales tax from being collected on food purchased with SNAP
bene?ts. The County's guidance is out of compliance with Section 4(3) of the
Food and Nutrition Act and 7 CFR 

We advised Cook County via phone call on June 28. 2017. that this option for
managing the tax was unacceptable. However. as of August this

alternative still appears on the Cook County website (?Sweetened Beverage
Tax Regulation 

Consequently. this letter sonres as advance noti?cation that DHS could soon be
subject to suspension or disallowanco of Federal Financial Participation (FFP)
administrative funds in accordance with 7 CFR 276.4020?) unless this refund
alternative is removed and retailers noti?ed. or the implementation is delayed
until retailers can appropriately program front end pointoof-sale systems.

AN 

 

Mr. James T. Dimas
Page 2

The State must take immediate steps to address Cook County compliance in
this area. Within 14 days from the. date of this letter. DHS must submit a
Corrective Action Plan (CAP) that speci?cally addresses the following:

. How the implementation of the Cook County tax will be adjusted to
conform with the Food and Nutrition Act and 7 CFR 27.2.llb). or

Continuation of a delay in implementation along with a timeline and
plan that allows for preper implementation of the tax at the point-of-
sale by SNAP authorized retailers.

if FNS determines that DHS has failed to meet the requirements set forth in
this letter to satisfaction. FNS will issue a formal warning letter in
accordance with 7 CFR 276.4. DHS would then have 30 days to submit
additional evidence that the State is in compliance or submit a revised CAP. if
the response is inadequate. FNS could suspend Federal funding of State
administrative expenses.

We appreciate your commitment and attention to addressing these issues. Our
goal is to help DHS avoid suspension or disallowance of administrative
funding and ensure access to SNAP for eligible households in illinois. FNS
staff is available to provide technical assistance and guidance to assist the
State. If you have any questions or wish to discuss this further please contact
me at (312) 353-8663 or Susan Holzer at (312) 353-1478. Thank you.

Sincerely.

gm 5%

Tim English
Regional Administrator
Midwest Region

cc: Diane Grigsby Jackson. Director Division of Family and Community
Services,