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Soda tax resurfaces in Portland, Oregon

  • Sep 20, 2017 | Gail Cole

 Portland, Oregon, is the latest city to consider a tax on sugar-sweetened beverages.

Oregon has toyed with soda taxes in the past, to no avail. Legislators introduced a tax on sweetened beverages in 2011 and in 2013, and Upstream Public Health backed one in 2016. This time around, a tax on sugary beverages is being sought by the Coalition for Healthy Kids and Education, “a group of doctors, parents, experts and community leaders supporting kids in Multnomah County.”

The coalition is proposing an excise tax of 1.5 cents per ounce on the distribution of many sugar-sweetened beverage products (SSBP), including energy drinks, sodas, sports drinks, and sweetened teas. It would be levied on the first non-exempt distribution of SSBP and paid by distributors, not retailers — although the cost would undoubtedly be passed on to consumers. At checkout, it would mean paying an extra 18 cents on each 12-ounce can.

The following beverages would not be subject to the tax:

  • Beverages for medical use
  • Diet sodas and other drinks sweetened with non-caloric sweeteners
  • Fruit and vegetable juice
  • Infant formula
  • Meal supplements/replacements containing carbohydrates, proteins, and minerals and vitamins
  • Milk and milk alternatives

As the tax would have to be approved by popular vote, the coalition has drafted a ballot measure and is currently working to get it on the May 2018 ballot. To do so, it needs to amass roughly 18,000 signatures by December 15. If ultimately enacted as written, the tax would take effect July 1, 2018.

Should the tax be instituted, it would fund expanded preschool and a variety of early education programs such as fitness classes, nutrition education, physical education, and school gardens. To promote the tax, the coalition is focusing on the children of Oregon: what many are missing (early education) and what too many are consuming (sugary beverages, which can lead to diabetes, heart disease, and other health problems).

The opposition

Taxes on sugary beverages are always opposed. In Oregon, Move Forward Multnomah is spearheading the anti-tax campaign. It predicts a bleak future of higher grocery bills and shifting consumer habits, warning that shoppers will migrate to non-beverage-tax locations to quaff their thirst.

Jack Evans, a spokesman for Move Forward Multnomah, argues the tax “is regressive, meaning it disproportionally hits working-class and low-income families.” His coalition isn’t alone in making this point. In March, the conservative-leaning Tax Foundation pointed out that soda taxes are regressive: “A 10 percent soda tax could burden high-income families by $24.29, while poor families would be harmed nearly twice that amount at $47.38.”

Just like Seattle

There’s a long-standing friendly rivalry between Portland, Oregon, and its northern neighbor, Seattle — a tension often exploited on Portlandia. Seattle instituted a special local tax on sugary beverages earlier this year (it takes effect Jan. 1, 2018). Could this be what’s really behind the greater Portland area’s drive for a tax on sugary drinks? Seattle voters said yes to it. Will voters in Multnomah County?

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.