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The Colorado Supreme Court has upheld a municipal ordinance charging a $0.20 "waste reduction fee" for paper grocery bags and prohibiting disposable plastic bags, ruling the charge is part of a regulatory program of waste management and not a tax. Colo. Union of Taxpayers Found. v. City of Aspen, No. 16SC377 (Colo., entered May 21, 2018). After two members of the plaintiff advocacy group paid the bag charge in Aspen, the group sued the city and members of the city council alleging the charge was a tax subject to voter approval under the state's Taxpayer Bill of Rights. The trial court and the Colorado Court of Appeals ruled in the city’s favor. The court noted that grocers are permitted to retain a portion of the $0.20 charge to provide information to customers, train staff and improve collection and administration, while the remainder is submitted to the city on a form separate…

A vintner has filed a lawsuit alleging Colorado's “wine development fee,” charged to wholesalers, is an unconstitutional excise tax. Vineland Corp. v. Colorado, No. 18-30199 (Colo. D.C., filed April 24, 2018). Since 1990, Colorado has imposed a 10-year renewable excise tax of one cent per liter on all vinous liquors sold in the state. In 1992, the state passed the Taxpayers Bill of Rights (TABOR), which mandated advance voter approval for extension of expiring taxes; in 1997, the legislature amended the 1990 act, renaming the excise tax a “wine development fee.” The plaintiff seeks declaratory judgment that the fee is “an impermissible attempt to extend an expiring tax without voter approval, and that this attempt to rename an excise tax surcharge [] without such voter approval is a violation of TABOR.” Further, the plaintiff seeks injunctive relief, attorney’s fees and a refund of all fees paid in the past four fiscal…

Ireland’s tax on sugar-sweetened beverages (SSBs) will take effect May 1, 2018, following a European Commission finding that the tax does not constitute state aid. According to a press release, "The Commission in its assessment found that soft drinks can be treated differently to other sugary products in view of health objectives. For example, the Commission took into account the fact that soft drinks are the main source of calories devoid of any nutritional value and thereby raise particular health issues. Furthermore, soft drinks are particularly liable to lead to overconsumption and represent a higher risk of obesity, also compared to other sugary drinks and solid food. On this basis, the Commission concluded that the scope of the Irish sugar sweetened drinks tax and its overall design are consistent with the health objectives pursued and does not unduly distort competition."

The American Heart Association, Childhood Obesity Prevention Coalition and Anti-Hunger and Nutrition Coalition have filed a lawsuit to appeal and amend the ballot title and summary of an initiative that would ban Washington's local governments from levying new taxes on sugar-sweetened beverages (SSBs). In re Ballot Title & Summary for Initiative No. 1634, No. 18-2-01924-34 (Wash. Super. Ct., filed April 9, 2018). The petition alleges that after Seattle's SSB tax took effect January 1, 2018, beverage industry groups filed the initiative in an attempt to stop other jurisdictions from adopting similar taxes. The petition also alleges that the ballot title and summary are “misleading and prejudicial” because they purport to ban new taxes on "groceries," a measure that the advocacy groups predict would be “disfavored” by voters.

The maker of Kombucha Dog beverages has filed lawsuits against Trader Joe’s Co. and other kombucha producers alleging the companies misrepresent the amount of alcohol and sugar in their products and violate federal and state laws regulating the sale of alcohol beverages. Tortilla Factory, LLC v. Trader Joe’s Co., No. 18-2977; Tortilla Factory, LLC v. Better Booch, LLC, No. 18-2980; Tortilla Factory, LLC v. Makana Beverages, Inc., No. 18-2981; and Tortilla Factory, LLC v. Rowdy Mermaid Kombucha, LLC, No. 18-2984 (C.D. Cal., filed April 9, 2018). According to Tortilla Factory's complaints, kombucha's post-bottling fermentation can cause it to develop an alcohol content of 0.5 percent or more by volume, subjecting it to regulation under federal law, including Alcohol and Tobacco Tax and Trade Bureau regulations that govern production, labeling and distribution. The complaints assert that independent testing revealed that the defendants' products contain between 1.0 and 2.7 percent alcohol but…

The Ninth Circuit has granted an en banc rehearing of its September 2017 decision to block a San Francisco ordinance requiring health warnings on sugar-sweetened beverages (SSBs) on the grounds that it unduly burdened and chilled speech protected by the First Amendment. Am. Beverage Ass’n. v. City & Cty. of San Francisco, No. 16-16072 (9th Cir., entered January 29, 2018). The September ruling overturned a 2016 district court decision determining that the city’s interest in public health and safety was a reasonable basis to enforce the ordinance, which required black-box warning labels on all advertising for SSBs that could take up as much as 20 percent of the advertising space. In addition, the Pennsylvania Supreme Court has agreed to hear a challenge to Philadelphia’s SSB tax that claims the 1.5 cent-per-ounce tax violates state law; the challengers allege that because the tax is levied on distributors and ultimately borne by…

A state senator in Pennsylvania has reportedly announced plans to introduce a bill that would bar any municipality in the state from levying a tax on sugar-sweetened beverages (SSBs). If enacted, the bill could invalidate the 1.5-cent-per-ounce tax that took effect in Philadelphia in January 2017 after a failed challenge in court. Although Rep. Mark Mustio (R-Allegheny) represents part of the Pittsburgh area, he has been critical of the effect of the tax on Philadelphia retailers, claiming that grocery stores have experienced as much as a 20 percent drop in revenues as consumers crossed over to suburban counties to buy SSBs and other items.

The Scottish Government is seeking public comment on a consultation that proposes actions to improve diet and reduce obesity in Scotland. The government previously announced funding of more than $55 million over five years to limit the marketing of food high in fat, sugar and salt and provide weight-loss support for people with type 2 diabetes. The consultation, which is open through January 31, 2018, asks questions about promotions and marketing, “out of home” or restaurant eating, labeling, product reformulation and taxes on sugar-sweetened beverages or similar products. Scotland is also considering proposals to limit “junk food” advertising and provide support for small and mid-sized food manufacturers to reformulate and develop healthier products.

Chicago officials have voted to repeal a sugar-sweetened beverage (SSB) tax approved in November 2016 by the Cook County Board of Commissioners but delayed by a lawsuit arguing that the tax was unconstitutional. The tax took effect in August 2017 after a court dismissed the Illinois Retail Merchants Association's lawsuit. Retailers reportedly saw SSB sales decline 25 to 50 percent, while retailers with locations in surrounding counties not subject to the tax saw sales increase. In addition, the Chicago Tribune reported, "Internal polling for one Cook County commissioner showed more than 90 percent of constituents opposed the soda tax.” The repeal will take effect December 1, 2017. Other jurisdictions continue to experiment with SSB taxes. In April 2018, Ireland will begin taxing non-alcoholic, water- and juice-based drinks with an added sugar content of 5 grams or more per 100 milliliters. Pure fruit juices and dairy products will be exempt from the…

The Ninth Circuit Court of Appeals has reversed a lower court's denial of a preliminary injunction stopping the warning-label portion of San Francisco's sugar-sweetened beverage (SSB) tax from taking effect. Am. Beverage Ass'n v. City & Cty. of San Francisco, No. 16-16072 (9th Cir., entered September 19, 2017). Additional information about the complaint and denial appears in Issues 573 and 605 of this Update, and details on the enforcement delay and associated amicus briefs appear in Issues 592, 607 and 613. San Francisco's warning-label ordinance would require a warning about the health effects of SSBs—specifically, "Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay"—to occupy 20 percent of the visible portions of fixed SSB advertising, including billboards, structures and vehicles. After several industry associations challenged the requirement, the district court held that the warning was not misleading, would not place an undue burden on the plaintiffs' commercial…

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