Chicago shoppers will have an extra month before facing a new tax on so called “checkout bags.”
Starting Feb. 1, the 7-cent tax will be applied to each paper or plastic bag. The mayor’s office estimates the tax will generate about $13 million in revenue in the first year. Retailers will get to keep 2 cents for every bag, while the remaining 5 cents will go into city coffers.
Aldermen approved the new tax in November as part of an ordinance that also repealed the city’s year-old ban on plastic bags at large chain stores.
The tax was supposed to start Jan. 1, but the mayor’s office announced in a letter to businesses that it would extend the start date by a month.
Tanya Triche, VP and General Counsel for the Illinois Retail Merchants Association, said she heard from concerned business owners who worried they couldn’t prepare in time.
“It’s really difficult to implement a new tax. It’s not like increasing or decreasing an existing tax,” Triche said. “Retailers have to update their software a lot of times, especially the smaller ones, and sometimes they even have to get new hardware.”
The existing ban on plastic bags did not apply to smaller stores. Triche said those retailers will have to pay the city a 7-cent tax on every plastic bag left in their stores at the end of 2016. To do that, businesses need to count every plastic bag in their stores on New Year’s Eve. A task, Triche said, that is difficult to complete during the holiday season.
Some bags will be exempt from the tax, including bags for frozen foods; flowers, potted plants or other damp items; packaging for loose, bulk items like fruit or nuts; bags that are sold in packages, like boxes of garbage bags; and take-out bags.
Lauren Chooljian covers city politics for WBEZ. Follow her at @laurenchooljian.