Tag Archives tax

The Supreme Court of Ireland has held that Subway's breads are subject to value-added tax (VAT) because they contain too much sugar to be considered a staple product. Under the country's VAT law, bread can contain up to 2% sugar in the flour to be classified as a staple product exempt from the tax; Subway's breads contain about 10% sugar in the flour for both the white and wholegrain varieties. Following the ruling, the breads will be taxed at 13.5% under the law. The Irish court reached the ruling following a challenge by a Subway franchisee alleging it should not have to pay the VAT.

A Washington, D.C., Council member, with the support of seven other members, has introduced a tax on sugar-sweetened beverages (SSBs) that would replace a sales tax that took effect in early October 2019 with an excise tax applied to SSB manufacturers. According to a press release, the Healthy Beverage Choices Act of 2019 "repeals the existing 8% sales tax on sugary drinks (passed in 2010 and raised in 2019) and creates a new 1.5 cent per ounce excise tax on sugary drinks in the District," shifting the added cost from appearing "at the register" to appearing "on the price tag." The proposed tax would fund parks and healthy eating advocacy programs.

A U.K. modeling study has apparently found that a 20% tax on foods with high levels of sugar could reduce rates of obesity more than taxes on sugar-sweetened beverages (SSBs). Scheelbeek et al., "Potential impact on prevalence of obesity in the UK of a 20% price increase in high sugar snacks: modelling study," BMJ, September 4, 2019. The study model predicted the effects of a 20% price increase on "three categories of high sugar snacks: confectionery (including chocolate), [cookies], and cakes." The model reportedly showed that the price increase would cause average Body Mass Index numbers for U.K. residents to decrease by 0.53. "This change could reduce the UK prevalence of obesity by 2.7 percentage points," the researchers assert.

Washington voters have reportedly approved a ballot measure that will prevent the state legislature from implementing a tax on sugar-sweetened beverages (SSBs). The measure will not repeal Seattle's tax but will prevent other local governments within the state from imposing new SSB taxes. A similar initiative in Oregon failed to pass; critics of the measure reportedly argued that the language could be broadly construed to apply beyond groceries to food served in restaurants.

The Pennsylvania Supreme Court has affirmed a lower court’s ruling upholding Philadelphia’s tax on sugar-sweetened beverages (SSBs), holding that the tax is not preempted by state law. Williams v. Philadelphia, Nos. 2 EAP 2018, 3 EAP 2018 (Pa., entered July 18, 2018). The 1.5-cents-per-ounce tax, which took effect in January 2017, applies to SSB distributors rather than buyers and thus does not duplicate consumer sales tax, the court held.

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…