New York's c-store industry is "aghast" at the oversized "obesity tax" on sugar-sweetened beverages Paterson proposed Tuesday in his new state [image-nocss] budget, said the New York Association of Convenience Stores (NYACS), a member of the coalition.
The new tax would add $1.44 to the price of a typical 12-pack of non-diet Coke or Pepsi cans, nearly 10 times the state excise tax on a 12-pack of beer.
"Besides artificially driving up prices, it would create a price differential more than sufficient to chase our customers away to nearby Native American stores to buy these beverages 'tax free,' replicating the cigarette tax evasion epidemic that has crippled our stores," said NYACS president James Calvin.
The penny-per-ounce excise tax would apply to any nonalcoholic beverage, carbonated or noncarbonated, containing more than 10 calories per 8 ounces. That captures non-diet soda, water, sports drinks, energy drinks, fruit and vegetable drinks containing less than 70% natural juice, bottled coffee and tea, and powdered and frozen concentrates.
Only dietary aides, infant formula, milk and milk products and exports would be exempt.
Paterson said the tax would increase the price of sugar-sweetened beverages by 17%, "which will reduce consumption by approximately 15%, improve nutrition, raise revenue for health programs and recover some of the health costs caused by consumption of high calorie, nutrient poor foods and beverages."
Calvin said, "We don't understand why customers who consume these beverages in moderation should pay a financial penalty because of the dietary habits of some of their neighbors. It was the same thing with deposits on bottled water. Why make people who were already recycling empty bottles at curbside start paying a deposit and schlepping them back to the store to redeem them for recycling?"
The excise tax would be imposed at a rate of $7.68 per gallon of beverage syrup and $1.28 per gallon of prepackaged soft drinks (one cent per fluid ounce). It would be collected at the "distributor" level, defined as an importer, bottler or manufacturer.
With an effective date of Sept. 1, 2010, the new taxes would be designed to increase revenues by $1 billion a year on an annualized basis, representing sales of the equivalent of 1.4 billion six-packs.
"In other words, the solution to obesity is for cash-strapped, thirsty New Yorkers to pay $1 billion more to their bloated state government," said Calvin.
As the state legislature debates Paterson's budget proposals, NYACS will oppose the new tax on its own and as a member of New Yorkers Against Unfair Taxes. It's website is www.nobeveragetax.com. The coalition's membersincluding other state business groups, businesses and thousands of New York residentsagree that this is not the time to tax the groceries of New Yorkers.
"New Yorkers are struggling to make ends meet in this economy and we shouldn't bear the burden of fixing the Governor's budget problems," said Nelson Eusebio, chairman of New Yorkers Against Unfair Taxes. "Another tax will be detrimental to hardworking New York businesses and residents."
The beverage industry currently supports thousands of well-paying jobs in New York, totaling some $6.7 billion in wages, the group said. These statewide jobs are held by New Yorkers in manufacturing, distribution and retail. The nonalcoholic beverage industry in New York State has a direct economic impact of $7 billion per year and supports an additional $18 billion in economic activity.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.