CHICAGO — It’s been almost two years since sweetened-beverage taxes were a primary focus of the beverage industry, after the country took a more conservative view of taxation and regulation in 2016. But since the beginning of the year, proposals for new excise-tax options have cropped up in several states. Here’s a look at seven proposals we’re watching ...
A 2-cent-per-ounce tax proposal in California has been deferred for at least a year after sponsoring Assemblyman Richard Bloom pulled the plan off the table, saying it didn’t have enough support to pass, according to an Associated Press (AP) report. New taxes need support from two-thirds of lawmakers to pass.
The delay “gives us the time to build the support we need to get to a floor vote," Bloom told the news agency in April. California also briefly entertained a proposal to limit the size of fountain drink cups in restaurants and convenience stores to 16 ounces. That plan, floated by Assemblyman David Chiu, also was pulled for lack of support, said AP.
In April, Connecticut Gov. Ned Lamont included a 1.5-cent-per-ounce tax on sugar-sweetened drinks in a recent budget proposal, even while acknowledging that getting the tax approved will be a major challenge. “The industry lobbying is going to be pretty ferocious,” he told AP. “I don’t know if the legislature can stand up to it.” Lamont estimated the tax would generate $163 million per year, helping to fill a projected $3.7 billion budget deficit.
Representatives in Massachusetts are considering a graduated soda tax. The proposal requests taxing sugar-sweetened drinks as follows:
- Beverages with 7.5 grams of sugars or less per 12 fluid ounces will not be taxed.
- Beverages with more than 7.5 grams but less than 30 grams of sugars per 12 fluid ounces will be taxed at a rate of 1 cent per ounce.
- Beverages with 30 grams of sugars or more per 12 fluid ounces will be taxed at a rate of 2 cents per ounce.
Money raised through the tax would go toward the creation of a Children’s Health Promotion Fund to promote childhood health and wellness initiatives. The proposal is current being discussed in the state’s Joint Committee on Revenue.
4. New York
In New York, the state assembly is considering a 1-cent-per ounce tax on sweetened beverages to support a new Children’s Health Promotion Fund, which is intended to fund statewide childhood obesity prevention activities and programs. If approved, the tax would take effect July 1, 2020.
5. Rhode Island
The Rhode Island General Assembly is considering a bill that would add graduated excise tax to sugar-sweetened drinks. Specifically:
- Beverages with less than 5 grams of sugar per 12 fluid ounces would not be taxed.
- Beverages with more than 5 grams but less than 20 grams of sugar per 12 fluid ounces would be taxed at a rate of 1 cent per ounce.
- Beverages with 20 grams of sugar or more per 12 fluid ounces would be taxed at a rate of 2 cents per ounce.
If approved, the tax would take effect Jan. 1, 2020.
State representatives in Vermont have proposed a 2-cent-per-ounce tax on sugar-sweetened beverages sold in the state. The funds would go to the state’s Adverse Childhood Experiences Initiative Fund to, among other things, “support programs directed at improving childhood nutrition.” If approved by the state legislature, the tax would take effect July 1.
7. West Virginia
West Virginia is one of only four states (along with Arkansas, Tennessee and Virginia) that already has a state soda tax. Recently, state leaders have discussed including the 1-cent-per bottle tax to close a $100 million budget gap. No official proposal has been made, according to reports.