Tax on Sugary Drinks Goes Flat in Massachusetts

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By Aaron Nicodemus

A proposal to tax sugary drinks was withdrawn April 24 during the discussion of the Massachusetts budget, but it may still find support in the Legislature.

Rep. Kay Khan (D) and several other legislators proposed an amendment (No. 866) to the House budget that would have levied a one- and two-cent per fluid ounce tax on drinks containing more than five grams of sugar. According to the amendment, drinks with fewer than five grams of sugar, bottled in containers of 12 fluid ounces or less, wouldn’t be taxed.

Drinks with between five and 20 grams of sugar would have been taxed one cent per ounce, up to 12 ounces, and drinks with more than 20 grams of sugar in bottles larger than 12 ounces would have been be taxed two cents per ounce. Syrups and powders that are mixed with water to make sugary drinks would also have been taxed one and two cents per fluid ounce of drink created.

Exempted from the proposed tax were a long list of beverages, including 100 percent fruit or vegetable juice; beverages in which milk, soy, rice or other milk substitute were the primary ingredient; coffee and tea without sweetener; infant formula; beverages for medicinal use; and water without sweeteners.

The tax could have raised an estimated $360 million per year, according to its supporters. The money would have been paid into a newly created Children’s Health Promotion Fund, which would have been administered by the state’s Department of Health.

Legislation Pending

Khan and her eight co-sponsors withdrew the amendment during a budget hearing in the state House of Representatives.

“Representative Khan believes that a tiered tax on sugary drinks would provide a reliable mechanism for funding and implementing programs that promote public health in the Commonwealth,” Khan’s chief of staff, Caroline A. Medina, told Bloomberg BNA in an emailed statement. “While the amendment was withdrawn, she has filed legislation on this topic ( H.3329) and will continue to advocate for its advancement this session.”

That bill is waiting for a hearing before the Joint Committee on Revenue.

Berkeley, Calif. imposed a tax on soda in 2015, and the city of Philadelphia imposed a 1.5-cent tax on sugary and diet beverages last year. Other municipalities that have imposed taxes on sugary drinks include Cook County, Ill., and Boulder, Colo., as well as San Francisco, Oakland, and Albany, Calif.

A tax on sugary drinks has never made much headway in Massachusetts. The tax was proposed several times during the administration of Gov. Deval Patrick (D)—who indicated he would approve it—but the tax never made it through the Legislature.

To contact the reporter on this story: Aaron Nicodemus in Boston at anicodemus@bna.com

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

For More Information

Text of Amendment No. 866 is at http://src.bna.com/ob1.

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