Photo: Mustafa Sayed (flickr)
Even after several cities passed taxes on sugary beverages, debate continues over whether the taxes are doing what they’re supposed to do, as well as how to implement these new levies.
A recent study has showed that sugary drink sales dropped 10 percent in the year following a soda tax in Berkeley, California.
Bottled water sales went up 15 percent, the study said.
But the American Beverage Association, a vanguard of soda tax opposition, said that calories from untaxed beverages such as milkshakes and yogurt smoothies went up by 31 calories per person per day.
In Philadelphia, where a tax of 1.5 cents per ounce on sugary drinks went into effect on January 1, city data showed that taxes from wages in beverage-related businesses increased in the first quarter of 2017.
That flies in the face of predictions from critics who said the tax would drive jobs out of the city.
Wage taxes from beverage business increased by a total of 14 percent compared to a year ago, according to the city’s Department of Revenue.
Lobbyists for beverage industries questioned the department’s numbers, however, saying the tax cost hundreds of union jobs in the city, and citing layoffs at supermarkets, a Canada Dry plant and Pepsi plants that might not be counted until the second quarter.
The tax is funding an expansion of city’s preschool program.
In Cook County, Illinois, officials passed a rule that excludes taxes on sugary drinks that are made with food stamps.
That move marks the second time the decision was flip-flopped since it was approved late last year.
Federal law prohibits state and local taxes on purchases made with SNAP benefits.
County officials hoped to get around this rule by applying the tax, which goes into effect on July 1, to the selling price of all sugary drink purchases instead of at the register.
But the state’s Department of Revenue decided this month that that strategy won’t fly.
Illinois officials said that charging the tax on food stamp purchases amounts to “overcollection” combined with sales tax on those drinks.
Seattle Joins Ranks
Seattle’s city council passed a tax of 1.75 cents per ounce on sugary beverages.
The council cited the measure as a way to curb diabetes and heart disease caused by excessive sugar in diets. The money is meant to go toward programs that target the achievement gap between students of color and white students.
The tax is slated to go into effect on January 1 next year.
The rule excludes drinks that primarily contain milk (yes, even a S’more Frappuccino from Starbucks), as well as alcoholic beverages and drinks with 100 percent fruit juice. Diet drinks are also exempt.
- In Berkeley, Soda Tax Is Doing What It’s Supposed To Do (Forbes)
- Cook County Reversal: Soda Tax Won’t Apply To Food Stamp Purchases After All (Chicago Tribune)
- Even With Soda Tax, Philly’s Food And Beverage Wages Rose In 1st Quarter 2017 (Philadelphia Inquirer)
- How Much Will All These Sugary Drinks Cost Under The Soda Tax? (The Stranger)