With the Labor Day holiday behind us, football stadium attendees and tailgaters looking to quench their thirst may have a decision to make when choosing between soda and beer, if they make their purchase in a municipality that imposes a sugar-sweetened beverage or soda tax.
In some cities, soda taxes have caused some nonalcoholic beverages, including sodas and soft drinks, energy drinks, and tea to be more expensive than beer.
Philadelphia residents are facing a $0.015 per fluid ounce sugar-sweetened beverage tax on pre-sweetened coffee or tea, sport drinks, flavored water, energy drinks, and drinks containing artificial sweeteners, compared to a $0.08 per gallon excise tax for beer. To put that into perspective, there are 128 fluid ounces in one gallon, so the beer tax is only $0.000625 per ounce.
In Cook County, Ill., which includes Chicago, a $0.01 per ounce tax on sugar-sweetened beverages, in comparison to a $0.231 per gallon excise tax on beer, may leave some fans scratching their heads before making any purchases. The Cook County soda tax went into effect Aug. 2, 2017, but there was some confusion amongst retailers about the proper way to apply the excise tax.
Under the original soda tax regulations, retailers who were unable to program point-of-sale machines to avoid charging the tax on purchases made with food stamps were allowed to tax sweetened beverages and provide refunds to food stamp customers. After the U.S. Department of Agriculture’s Food and Nutrition Service (FNS) notified the state that implementation of the tax violated federal rules prohibiting state or local taxes on purchases made with food stamps and warned that FNS would withhold federal funds if the ordinance was not amended, Cook County revised their regulations to permit retailers to either program their point-of-sale machines to avoid taxing food stamp purchases on sweetened beverages automatically, or manually override the tax from being charged on such purchases.
The Raider Nation in Oakland, California is being taxed at $0.01 per ounce on sugar-sweetened beverages, and the funds will be used to fund health care initiatives. Meanwhile, purchases of beer in California are taxed at $0.20 per gallon.
Beginning in 2018, Seattle will apply a $0.0175 per ounce privilege tax on distributors of soda, sports drinks, energy drinks, flavored water with added sweeteners, certain fruit juices, sweetened ice teas and coffees, and other drinks containing added sweeteners but exempts diet sodas. Washington currently imposes a $0.26 per gallon excise tax on beer.
With the concept of soda taxes catching on nationwide, the tax may just encourage more sports goers to dodge soda and purchase water or beer at game concessions and tailgating events.
Continue the discussion on LinkedIn: Will soda taxes encourage healthier decision-making for its citizens while increasing revenues?
Get a free trial to Bloomberg BNA Tax & Accounting's State Tax solution, a comprehensive research service that provides deep analysis and time-saving practice tools to help practitioners make well-informed decisions.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)