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Navajo Nation Considers Tax Hike on Junk Food—Again


 Navajo Nation reconsiders taxing junk food.

Last summer, the Navajo Nation Council narrowly rejected the Junk Food Sales Tax Act. Had it passed, the act would have imposed a 2% tax on junk food sold in the Navajo Nation, which spans more than 27,000 square miles through Arizona, New Mexico and Utah.

Council members who opposed the tax argued that higher taxes aren’t the way to “discourage Navajo people from buying unhealthy foods.” They worried that higher taxes would simply “draw business away from the Navajo Nation.”

But the idea to tax junk food at a higher rate isn’t going away. In early November, members of the Naabik’iyátí’ Committee approved Legislation No. 0289-13, which would create the Healthy Diné Nation Act of 2013 and impose a 2% tax on assorted “junk foods.” Revenue raised by the tax would support “community wellness projects.”

Like the Junk Food Sales Tax Act, the Healthy Diné Nation Act of 2013 will be a tough sell. While no one argues with statistics pointing to an alarming rise in rates of obesity and diabetes, not everyone thinks taxes are the answer. Council Delegate Jonathan Nez, for example, “believes healthy living is a personal choice.” He proposes putting the junk food tax to the people in a referendum: “Let the people decide whether they impose a tax on themselves.”

Others think an even greater tax hike is needed to change behavior. Council Delegate Dwight Witherspoon doesn’t believe a 2% tax would “make a behavioral change that we’re seeking.” He points to the high rates imposed on alcohol and cigarettes, and suggests starting with a 20% tax increase on junk food.

The alarming statistics

According to the Office of Minority Health, “Native Americans and Alaskan Natives are 60% more likely to be obese than non-Hispanic whites.” They’re over “twice as likely” as non-Hispanic whites of a similar age to be diagnosed with diabetes. 33.5% of American Indians living in southern Arizona are diabetic.

Taxing behavior deemed unhealthy or costly to society is not new: consider tax rates on alcohol and tobacco products. A higher rate of sales tax on junk food may not stop the alarming rise in obesity and diabetes. But, if it is enacted, perhaps it could help.

The Healthy Diné Nation Act of 2013 now moves to the Navajo Nation Council for final consideration.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.