Strings attached to retailers’ share of Rahm’s 7-cents-a-bag tax

Mayor Rahm Emanuel is making it somewhat difficult for retailers to take their cut of a proposed 7-cents-a-bag tax on paper and plastic bags.

A revenue ordinance introduced at Tuesday’s City Council meeting attaches strings before retailers can claim their two-cents-a-bag share.

It states that retailers would be “eligible” to collect the two-cents-a-bag “commission,” only when disposable bags are either sold or given to consumers at check-out and the store “separately states the tax on the receipt.”

Tanya Triche, vice-president and counsel of the Illinois Retail Merchants Association, said the receipt condition may be important “for accounting purposes,” but it may be difficult for small retailers to meet.

“There’s only so many things they can put on a receipt. There’s only so much space you can devote to a certain item the way software is written. We may run into an issue with some of the smaller retailers that may not have capacity to add the link and software to separate and state it on the receipt,” Triche said Friday.

Two years ago, the Illinois Retailer Merchants Association pushed hard for a 10-cent tax on paper bags that cost three times as much as plastic to allow retailers to recoup their costs and give consumers an incentive to bring re-usable bags on shopping trips.

But Emanuel and Ald. Proco Joe Moreno (1st), prime mover behind Chicago’s partial ban on plastic bags, stood their ground against the tax.

They argued then that retailers were free to charge for disposable bags, but the City Council wasn’t about to do the dirty work for them and wear the jacket for nickel-and-diming consumers.

Emanuel said he changed his mind because the partial ban on plastic bags had turned into a farce with giant retailers like Target and Jewel-Osco switching to thicker plastic bag capable of holding up to 22 pounds and being re-used 125 times.

On Friday, Triche said the retailers agreed to accept a two-cents-a-bag share of the new tax—with the remaining nickel going to the city–only after Emanuel agreed to lift the ban on plastic bags.

“It gives us something. We’re allowed to go back to thinner plastic bags we used to provide customers. The thin plastic bags cost one or two-cents. The thicker ones cost 7-to-12 cents. So it’s a big difference. It really helps cut our costs,” Triche said.

“Hopefully, people will eventually use fewer bags. But even if they don’t, we’ll still be able to go back to less expensive bags.”

Moreno and Ald. John Arena (45th) have declared their opposition to the 7-cent tax on disposable bags–and not because it’ll nickel and dime Chicago consumers who have had their fill of such taxes.

They disagree with the environmental premise.

If the goal really is to stop a ploy by major retailers to get around the city’s partial ban on plastic bags, then the city should ban plastic bags altogether and impose a ten-cent tax on paper bags, they contend.

Triche noted that, when Washington D.C. imposed a nickel-a-bag tax, consumers cut their use of disposable bags in half.

She predicted that Chicago would have similar results.

“When you go to the store and they tell you, ‘It’s 7-cents. Would you like a bag?’ people may take it that first time. But then they’ll know,” she said.

“There may be some customer unease in the beginning because they’re used to getting something for free. But people will adjust. In the convenience store market, people who buy just a couple of items may grab them and walk out of the store without a bag. But people on their weekly grocery trips will think twice about paying for their bags.”