Michigan moves to ban local soda taxes
- Sales Tax News
- Oct 18, 2017 | Gail Cole
Let there be no local tax on the sale of food. That’s the mission of Michigan Senator Peter MacGregor. His Senate Bill 583 would prohibit local governments from imposing any sort of tax or fee on “the manufacture, distribution, wholesale or retail sale of food for immediate consumption or nonimmediate consumption.” Sen. MacGregor says that allowing “a patchwork of certain cities and certain counties” to tax certain items would “kill these cities’ economy.”
However, it’s unlikely the senator is out to protect the exempt status of beef and carrots. Instead, his measure is inspired by the local taxes on sugary beverages that have multiplied in recent years. Boulder, Philadelphia, San Francisco, and Seattle are among the cities that have enacted so-called soda taxes, following a trend started by Berkeley in 2014. To date, Vermont is the only state to do so.
Indeed, the popularity of soda taxes may be fizzling. The controversial Cook County Sweetened Beverage Tax was repealed earlier this week, just a few months after it took effect. It will be interesting to see what happens in Michigan.
Many in the Michigan food industry (e.g., Potato Growers of Michigan, Michigan Farm Bureau) support the measure because “it would eliminate a looming threat to farmers and protect the state economy.” On the other hand, the bill is opposed by Healthy Kids Healthy Michigan, the State Alliance of Michigan YMCA, and the Michigan Municipal League.
The Senate overwhelmingly approved the measure and passed it on to the House for consideration on Oct. 4. If enacted, it wouldn’t impact state or local revenue because, as the bill analysis notes, “no local government in Michigan presently levies an excise tax on food.”
Changes in product taxability complicate sales tax, no matter what motivates the change. Tax automation software helps simplify compliance for businesses in all states. Learn more.