Food & Beverage Tax Developments in California, DC, Philadelphia, and Washington
May 17, 2010
Imposing new excise taxes on food and beverage seems to be a trend now in state and local taxation. Those areas with some of the worst business tax climates and/or highest tax burdens seem to be jumping first:
- California Democratic Senate Majority Leader Dean Florez has introduced a bill to impose a 1-cent-per-teaspoon-of-sugar tax on commercial beverage sales.
- D.C. City Council member Mary Cheh has proposed a 1-cent per ounce soda tax to fund a new program she’s sponsoring to require healthier food at public schools. After opposition from at least one of her colleagues on the soda tax, Cheh has indicated she may now pursue expanding the city’s sales tax to soda, emulating Maryland and Virginia. That would raise $6.5 million per year as opposed to $9 million from the special tax.
- Philadelphia has a 2-cent-per-ounce soda tax proposal.
- Washington State has a new candy and bottled water tax going into effect on June 1, followed by a 2-cent-per-can soda tax taking effect July 1. Wholesalers are considering going to the ballot to repeal.
An interesting note: the D.C. proposal and probably others base the tax on the amount of beverage a concentrated powder would produce. So a 19-ounce canister of lemonade powder, for instance, would face a tax of $2.56 based on the D.C. formula.