Illinois Lawmakers Tried to Implement a ‘Pizza Tax' on Food Deliveries
Springfield lawmakers tried to pass a $1.50 food delivery tax over the weekend that would have impacted restaurants across Illinois. The proposal's details were unveiled hours before the Springfield legislative session was set to expire on Sunday, June 1. The bill hastily passed through the Senate late on Saturday, May 31, but failed to make it to the House for a vote.
The increase would have affected any food delivery by a motor vehicle (bicycles would be excluded) made online and was part of the 'The Retail Delivery Climate Impact Fee Act.' It would have added $1.50 to each delivery starting on January 1, and increased annually in step with the federal rate of inflation. The tax had been ambiguously teased for days as several media outlets reported a $771 million regional transportation shortfall for the CTA, PACE, and Metra. Colorado and Minnesota have implemented retail delivery fees that target companies like Amazon and Uber. The tax is seen as an alternative to motor fuel tax hikes.
Lawmakers only revealed specifics to the public on Saturday afternoon, but when details began to circulate, restaurant allies lambasted the tactic, calling it a 'pizza tax,' and criticized lawmakers for a lack of transparency. The transportation bill's sponsor, Chicago Democrat Sen. Ram Villivalam, defended his actions. CTA and other transportation officials say they need more money, or critical services and jobs could be cut. Public transportation is essential for the commutes of many restaurant workers.
The proposal attempted to carve out exceptions for prescription medicine and grocery deliveries, with knowledge that the elderly, disabled, and others with mobility issues depend on services for their livelihoods. Using delivery isn't so much a choice for members of these populations. When combined with federal cuts to Medicaid, many of the state's most vulnerable could see costs balloon. However, there's doubt that the exception, as presented, would apply to all grocery and medicine orders.
Third-party couriers, which have emerged as influential lobbyists across the country, predictably opposed the bill. When contacted on Saturday, a DoorDash spokesperson called the tax hike 'unnecessary.' The company stressed that deliveries aren't 'just for fancy sushi dinners' as they serve the aforementioned with mobility issues while '[bridging] the gap for families living in food deserts who need groceries, and helping low-income customers stretch their already-strained budgets further.'
'We will continue to work with Illinois lawmakers to help them better understand the unintended consequences of these kinds of policies that ultimately do more harm than good,' DoorDash's statement also reads.
While Gov. J.B. Pritzker endorses the need for transit reform and improvements, according to a transcript from Capital Fax, the governor was somewhat evasive when asked if he supported the delivery tax. He's gone on the record saying he opposes hikes that impact a broad swath of the population, and food delivery would seemingly fall under that category. Pritzker would rather see increases to sales tax, or individual and corporate income taxes. Lawmakers will likely take up the discussion once more during the fall session in Springfield.
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