Coke, Pepsi Pay Big Bucks in Washington to Ban Grocery Taxes

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Paul Shukovsky

A campaign to ban locally levied grocery taxes in Washington state is richly funded by beverage industry giants and portrays the measure as protecting working families from regressive taxation.

Initiative 1634 would prohibit new or increased local taxes, fees, or assessments on raw or processed foods, beverages, or their ingredients except for alcoholic beverages, marijuana products, and tobacco. The measure wouldn’t impact existing taxes in effect as of Jan. 15, such as Seattle’s 1.75 cents per ounce tax on distributors of sweetened beverages that passed in 2017.

The Yes! to Affordable Groceries campaign has received $4.76 million in donations with almost all of it coming from beverage manufacturers, according to July 10 Public Disclosure Commission records. In rounded figures, the Coca-Cola Co. contributed about $2.27 million, Pepsico Inc. contributed $1.71 million, Dr. Pepper Snapple Group Inc. contributed $709,000, and Red Bull North America contributed $56,000. The Washington Food Industry Association contributed $20,000.

In a July 10 conference call with reporters, the campaign sought to portray the ban as defending blue collars jobs and working families from another regressive tax in a state known for its regressive taxation regime.

‘Not About Big Soda’

“This has an impact on good family wage jobs, and that’s why we have been involved in this from the very beginning in trying to protect our members,” said Pete Lamb, senior business agent for Teamsters Local 174, whose members truck beverages to retail outlets. “We need more of these type of jobs, not less of them.”

Initiative 1634 Campaign Director Michael Mandell wrapped up the conference call by asserting that the measure isn’t designed simply to stop soda taxes.

“This is not just about big soda companies as some will incorrectly try to assert,” Mandell said. “Preventing regressive taxes that overwhelmingly impact Washington families is an issue that has resonated all across the state as you see the hundreds of thousands of signatures that have been collected. As we consider the evolution of tax policy throughout our state, it’s important to be united behind what we prioritize as being off limits. And that needs to include food and beverages.”

The campaign reports turning in more than 360,000 signatures to the Secretary of State’s office, well over the 259,622 signature threshold required to get on the November ballot.

To contact the reporter on this story: Paul Shukovsky in Seattle at pshukovsky@bloomberglaw.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bloombergtax.com

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