CHICAGO — Walgreens customers across Chicago have been overcharged for sparkling water because the drug store chain has been misapplying the Chicago Bottled Water Tax to seltzer and sparkling water, including beloved cult favorite brand LaCroix — possibly for years.
Lakeview resident Michael Nicolson noticed Wednesday that his Walgreens receipt from a recent purchase of the canned, flavored sparkling water included a $0.05 charge labeled "CHI BOTL WATER TAX."
Michael Nicolson's LaCroix receipt, which includes a line indicating the Chicago Water Bottle Tax was applied, even though his purchase doesn't qualify. [Provided]
Under the Chicago Bottled Water Tax, which took effect in January of 2008, retailers are supposed to apply the tax — $0.05 per bottle — to all brands of non-carbonated water intended for human consumption, according to the city's tax guide.
But the tax guide explicitly states that enhanced water products like Gatorade, Vitamin Water, Sobe Life Water, Perrier, Seltzer Water, Club Soda and other similar products, as well as any drink that qualifies as a soft drink, are exempt from the tax.
When contacted by DNAinfo about the apparent discrepancies in Nicolson's purchase, and in other spot checks conducted by DNAinfo staff at Walgreens locations across the city, Philip Caruso, a regional Walgreens media spokesman, confirmed that the tax has been mistakenly applied to purchases of sparkling water.
A receipt for a purchase of Pellegrino, which should not be susceptible to the Chicago Water Bottle Tax. [DNAinfo/Mina Bloom]
Caruso said he could not comment on how long the drug store chain had been inaccurately applying the water bottle tax to non-water bottle purchases.
Friday afternoon, Caruso sent the following statement:
"We corrected the issue and as of this morning our stores are charging the correct tax on these items." Caruso refused to comment further or answer additional questions, including how many stores were affected, how long this has been happening and whether customers will be getting their money back.
Despite repeated attempts, a city revenue department spokeswoman was not immediately able to answer questions. However, she did say the city made $10 million in revenue from the tax in 2014.
According to the Tribune, sales of Perrier, San Pellegrino and other fizzy waters have more than doubled over the last five years. The growth, which the Tribune says has reached $1.5 billion, has outpaced bottled water and Vitaminwater.
The city has a 3 percent tax on soft drink bottles and cans that include sweeteners.
But this tax doesn't apply to unsweetened seltzers and sparkling water, according to the state's tax guidelines, which spot-check purchases revealed — and Walgreens' Caruso confirmed — were also being taxed the additional water bottle fee.
The soda tax applies to soda, sport or energy drinks, sweetened tea, waters containing natural or artificial sweeteners, beverages containing 50 percent or less fruit or vegetable juice and other drinks commonly known as soft drinks, according to the guidelines.
The city's bottled water tax, instituted for both revenue and for environmental purposes, went into effect in 2008, with $10.5 million a year expected to roll in.
A LaCroix spokesman could not be reached for comment.
This is a developing story. Check back for updates.
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