The proposed soda tax, which would add approximately a penny per ounce to bottled drinks, is under scrutiny once again. New York Governor David Paterson is advocating adding a state sales tax exemption on diet sodas and bottled water. The first draft of the soda tax was projected to make close to a billion each year for the state, but the Senate and Assembly have been against the tax. They are willing to settle for an estimated $185 million that the renovated bill would bring in, with the exemption being listed for diet drinks.
Currently, only Arkansas and West Virginia have passed excise taxes specifically on soda, with Baltimore and Washington considering taxes on sugary sodas.
When New York State consumers buy bottled sodas and water at supermarkets now, they pay a sales tax just as they do for other products. In New York, the total sales tax is 8.875 percent, with 4 percent going to the state and the remainder to the county or city. Under the revised proposal consumers would end up paying an additional penny per ounce on sugary sodas and drinks. But that so called “sugar tax” would be collected not at the cash register but from the beverage bottler, and then passed on to the consumers. If diet sodas or bottled waters were purchased, they would avoid that tax and the sales tax as well. The state would reimburse localities for their portion of the lost taxes.
Opponents, mostly grocery store owners and associates, have been opposed to a tax on sodas because customers would have less money to spend on other products in their stores. Said Nelson Eusebio, executive director of the National Supermarket Association, “We don’t have a problem with the state balancing its books, but why are you taking it out of the industry that provides thousands of jobs for your state? The people affected most are urban minority dwellers. They have less money to spend on a product than someone who is more affluent. To fight obesity, let’s educate people. Taxation doesn’t equal good health.”
May 28th, 2010