Illinois Judge Strikes Down Chicago OTP Tax


According to the language found in Illinois Municipal Code Section 6(a)(2), a home rule city is not allowed to impose a tax on other tobacco products unless the city has already adopted such a tax before July 1, 1993. Since Chicago had adopted a cigarette tax prior to July 1, 1993, but not a tax on other tobacco products, then the court found that the state law prohibited the city from adopting the OTP taxes. The Chicago OTP tax rates struck down by the court included a $1,80 per ounce tax on roll-your-own smoking tobacco and smokeless tobacco, a $0.60 per ounce tax on pipe tobacco, and a $0.20 per cigar tax on little and large cigars.

According to Illinois law, the city of Chicago has until February 20, 2017 to file a Notice of Appeal if the city decides to appeal the decision to the Illinois Appellate Court.