Cities and counties around the country have been enacting so called “pop” or “soda” taxes on beverages that they deem to be “unhealthy”. Though often dubbed the “pop tax,” the new tax always applies to hundreds of beverages beyond soft drinks and creates a regulatory nightmare for small business.
The Californian cities of San Francisco, Oakland, and Albany, as well as Boulder, Colorado, Seattle, Washington, Philadelphia, and Cook County, Illinois have all imposed these taxes and local governments in Michigan are eyeing similar tax proposals.
While local governments always claim these taxes are in the interest of public health and safety, the real motivation is to raise revenue to fund more local government growth and bureaucracy and to bail out local budget deficits from years of over-spending. The tax in Cook County is expected to raise $224 million a year and the penny-per-ounce tax applies to both sugar and artificially sweetened drinks. Most local pop taxes go beyond just pop to include other ready-to-drink beverages such as sweetened coffees and teas, sports and energy drinks, and juice products that aren’t 100 percent juice. Keeping track of the rules and exceptions for “prepared” vs “unprepared” beverages has been a nightmare for retailers and small businesses.
NFIB will be working with other business groups this fall to pass legislation at the state level to forbid local governments from creating these new tax burdens.