Voters in Santa Fe, New Mexico, rejected a sugar-sweetened beverage (SSB) tax initiative that would have raised the price of SSBs by 2 cents per ounce. Political action committees, industry groups and advocacy organizations reportedly spent $3.25 million on the vote. Campaign finance reports show that Michael Bloomberg, who began his campaign for SSB taxes and portion caps during his term as mayor of New York City, contributed $1 million to a pro-tax committee. Issue 633
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A Massachusetts house bill proposing a one- and two-cent tax per fluid ounce of sugar-sweetened beverages (SSBs) has been withdrawn during a state budget hearing. The tax would have applied to SSBs containing more than five grams of sugar but excluded 100-percent juice, milk substitutes, infant formula and beverages for medicinal use. Although sponsor Kay Khan (D) withdrew the proposal, a spokesperson for her office told Bloomberg that she has filed legislation to pursue the tax. See Bloomberg BNA, April 25, 2017. Issue 632
Four cities and one county have reportedly passed taxes on sugar-sweetened beverages (SSBs), joining Berkeley, California, and Philadelphia, Pennsylvania, in adopting measures purportedly designed to curb sugary-drink consumption. According to media sources, voters in Boulder, Colorado, passed a 2-cent-per-ounce excise tax on SSB distributors, while those in San Francisco, Oakland and Albany, California, passed a 1-cent-per-ounce levy on distributors. In Cook County, Illinois, the board of commissioners also voted in favor of a 1-cent-per-ounce SSB tax. “The tide has turned on this issue, and momentum has swung in our favor,” said Howard Wolfson, senior advisor to former New York City Mayor Michael Bloomberg. “I am confident in the months ahead more municipalities will seek to implement soda taxes to help their citizens, and we will be willing to help them as they do.” See The New York Times, November 9, 2016; Crain’s Chicago Business, November 10, 2016. Issue 622
The Pennsylvania Supreme Court has denied an application for extraordinary relief filed by several industry groups in an effort to prevent Philadelphia’s 1.5-cent-per-ounce tax on sugar-sweetened beverages (SSBs) from taking effect on January 1, 2017. Williams v. City of Philadelphia, No. 160901452 (Ct. C.P., Philadelphia Cty., order entered November 2, 2016). The one-page order does not provide any reasoning for the decision. The lower court currently presiding over the case has indicated that it will rule on the tax’s legality before the January 1 enforcement date. See The Philadelphia Inquirer, November 2, 2016. Details about the industry lawsuit appear in Issue 617 of this Update. Issue 621
The World Health Organization (WHO) has published an October 2016 report claiming that “taxing sugary drinks can lower consumption and reduce obesity, type 2 diabetes and tooth decay,” according to a concurrent press release. Titled Fiscal Policies for Diet and Prevention of Noncommunicable Diseases (NCDs), the report collates information gathered during a May 2015 technical meeting of fiscal-policy experts who evidently concluded that “there is reasonable and increasing evidence that appropriately designed taxes on sugar-sweetened beverages would result in proportional reductions in consumption, especially if aimed at raising the retail price by 20% or more.” The report summarizes the effect of fiscal policies—including food and beverage taxes, nutrient-focused taxes and subsidies—on health outcomes in Denmark, Ecuador, Egypt, Finland, France, Hungary, Mauritius, Mexico, Philippines, Thailand and the United States. “Some of the challenges faced in implementation include a lack of appropriate capacity for tax administration, tax set at low levels that…
The American Beverage Association, other industry groups, retailers and distributors have filed a lawsuit against the city of Philadelphia challenging its tax on sugar-sweetened beverages (SSBs), arguing the statute unlawfully attempts to circumvent Pennsylvania’s taxation supremacy. Williams v. City of Philadelphia, No. 160901452 (Penn. Ct. C.P., Philadelphia Cty., filed September 14, 2016). The plaintiffs assert the statute creates “a roadmap for every local government in the Commonwealth [of Pennsylvania] to evade the Commonwealth’s supreme taxation structure on thousands of products— from over-the-counter pharmaceuticals to cars—merely by imposing a duplicative tax at a different level in the distribution chain than a tax already imposed by the Commonwealth.” Because the beverages subject to the Philadelphia tax are also subject to Pennsylvania tax, the city tax duplicates the state tax, the plaintiffs argue, which amounts to “seizing the taxing authority expressly reserved to the Commonwealth in contravention of the Sterling Act’s prohibition on…
Her Majesty’s Treasury (HM Treasury) has released the details of a proposed soft-drink levy announced during March 2016 budget talks as part of the U.K. government’s childhood obesity action plan. Slated to take effect in April 2018, the Soft Drinks Industry Levy (SDIL) would affect the manufacturers of added-sugar soft drinks “with total sugar content of 5 grams or more per 100 millilitres, with a higher rate for drinks with 8 grams or more per 100 millilitres.” The levy exempts beverages with no added sugar—including 100-percent fruit juice—as well as alcohol beverages with alcohol content above 0.5-percent alcohol by volume. The SDIL would also apply to imported soft drinks. HM Treasury has requested comments on the SDIL by October 13, 2016. Among other things, the government seeks evidence and views from respondents about (i) “the types of added-sugar low alcohol products that may be captured by the levy, and the appropriate approach…
The Philadelphia City Council Committee of the Whole has backed a 1.5 cents per-ounce tax on sugar-added and artificially sweetened soft drinks, a measure that the council anticipates will raise $91 million over the next year. If approved by final vote as expected, the tax will “fund quality pre-K expansion, community schools, reinvestment in parks and recreation centers, and help pad the City’s General Fund,” according to a June 8, 2016, press release. Philadelphia Mayor Jim Kenney (D) initially proposed a 3-cents-per-ounce levy on sugar-sweetened beverages, but the council concluded that such an increase would raise more revenue than needed. Instead, the committee opted to reduce the tax to 1.5 cents per ounce while expanding the scope to include diet soft drinks. The council also advanced a bill “offering tax credits to merchants that opt to sell healthy beverages in their stores.” “A 1.5-cent-per-ounce tax increase on soft drinks will…
Healthy Boulder Kids has submitted to the city of Boulder, Colorado, a draft initiative that would impose on distributors a 2-cent per ounce excise tax on beverages that contain at least 5 grams of sweeteners per 12 fluid ounces. Pending review and approval by the city clerk, the public health coalition would then have until June 28, 2016, to collect the requisite number of signatures to get the measure on the November ballot. Revenue from the proposed tax would reportedly be directed to health and nutrition programs aimed especially at low-income residents of the Boulder community. See Boulder Daily Camera, April 21, 2016. Issue 601
The U.K. Chancellor of the Exchequer George Osborne has announced a new levy on soft drink companies to be assessed “on the volume of sugar-sweetened drinks they produce or import.” In a budget presentation before Parliament, Osborne laid out a two-tiered tax scheme slated to take effect in April 2018, “to give companies plenty of space to change their product mix.” Under the levy, which exempts milk-based drinks and fruit juices, sugar-sweetened beverages will fall into one band with “a total sugar content above 5 grams per 100 milliliters,” or “a second, higher band for the most sugary drinks with more than 8 grams per 100 milliliters.” The U.K. Office for Budget Responsibility apparently anticipates that the levy will raise an estimated £520 million for increased sport funding in primary schools. “Many in the soft drinks industry recognize there’s a problem and have started to reformulate their products… So industry can…
