Could a self-checkout tax be coming?

Grocers and other big-box retailers could end up paying $5,000 a year for each one of their self-checkout stations in the Chicago suburb of Evanston, Illinois, if a city council member there gets his way. 

Eighth Ward City Council Member Devon Reid is set to propose a new tax that he said would apply to about 35 to 50 of the automated registers in his city. That includes self-checkout kiosks at stores like Whole Foods, Target and Jewel-Osco—each retailer has two locations in Evanston.

Reid told Winsight Grocery Business that he intends for the roughly $105,000 to $150,000 collected from the tax to be used to fund youth job placement in the Mayor’s Summer Youth Employment Program.  

“Self-checkout systems are removing jobs that would have been here locally,” Reid said.  

The tax would apply to stores with about 250 employees, so smaller businesses would not be impacted, he said. Failure to pay the tax would result in a fine equal to the cost of the original tax.  

Reid said the impetus for the bill was driven in part by the rise of artificial intelligence and other new technologies that threaten to replace workers, adding the funding from the tax “should support training and educating the youth for the jobs of tomorrow.” 

Reid said he was unaware of any other municipality in the country that imposes such a tax, which he believes will not impact the store’s bottom line enough to cause increases in prices.  

"We’re seeing stores like Amazon Go pop up that are fully automated,” he said, referencing the cashier-less convenience stores that launched in 2018, enabling shoppers to purchase items from the store without going through a checkout lane.  

Reid said he believes more companies will move toward this business model, where profits are directed out of the community without any job creation.