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Soda taxes sweep nation

  • Nov 9, 2016 | Gail Cole

 New soda taxes will soon take effect in four cities.

Update 10.26.2017: The Cook County sweetened beverages tax is repealed effective Dec. 1, 2017. The Albany, California beverage tax took effect April 1, 2017.

Update 11.11.2016: Cook County will tax sweetened beverages beginning July 1, 2017.

It may be an overstatement to say that soda taxes are sweeping the nation, but with yesterday’s election results in hand, it doesn’t seem like it. Proposed taxes on sugary beverages were approved in Boulder, Colorado and San Francisco, Oakland, and Albany, California. In Illinois, Cook County Board President Toni Preckwinkle is pushing for a penny-per-ounce soda tax to close a budget gap and her efforts are being backed by billionaire Michael Bloomberg, who tried to ban Big Gulp-sized drinks during his tenure as New York City mayor. Similar taxes are already in place in Berkeley, California, Philadelphia, Pennsylvania, and the state of Vermont. Sweeping the nation? Perhaps they are.

New soda taxes

Albany, California will tax sugar-sweetened beverages at a rate of 1 cent per ounce. The tax takes effect April 1, 2017. Additional information.

Boulder, Colorado will impose an excise tax of 2 cents per ounce on the distribution of drinks with added sugar, and on the sweeteners used to produce such drinks. The tax is to take effect on July 1, 2017.

Oakland, California will levy a penny-per-ounce tax on the distribution of sugar-sweetened beverages in Oakland beginning July 1, 2017. However, businesses with annual gross sales of less than $100,000 are exempt from the tax.

San Francisco, California will also impose a penny-per-ounce tax on the distribution of sugar-sweetened beverages beginning January 1, 2018. As in Oakland, businesses with annual gross sales of less than $100,000 are exempt.

The devil’s in the details

Exactly what qualifies as a taxable sugary beverage or sweetener varies from city to city. In Albany, for example, sugar-sweetened beverages must contain at least 2 calories per fluid ounce to be taxable. In San Francisco, the tax applies to sugar-sweetened beverages containing added sugar and more than 25 calories per 12 ounces. Alternative milk products, such as soy and almond milk, make the list of exempt beverages in San Francisco. Albany exempts beverages in which milk is the primary ingredient but makes no mention of alternative milk drinks.

Differences between the four new taxes are numerous and noteworthy and likely to make compliance challenging for companies doing business in more than one affected city.

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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.