WASHINGTON -- The Council of the District of Columbia has approved a budget that extends the city's 6% sales tax to sugar-sweetened and diet soda, sports drinks and energy drinks when sold in grocery and convenience stores. Drinks such as fruit juice, milk, tea, water and coffee will not be subject to the sales tax.
According to the National Automatic Merchandising Association, the new rules do not change the sales tax on beverages sold through vending machines, since vending sales, as well as restaurant and carryout sales, already are subject to the 6% DC sales tax, along with all food and drinks sold for immediate consumption.
Earlier proposed legislation would have levied a penny-per-fl.oz. tax on sweetened soft drinks.
The 6% drink tax, approved last week as part of the 2011 budget, is expected to generate $7.9 million in the next year. The money is earmarked for school programs promoting health. The final vote on the budget is scheduled for next month, after which it moves on to the mayor and then to Congress.
Vending operators were among a coalition of beverage industry members and local retailers who opposed the tax, arguing that it could hurt local businesses by pushing people to buy their groceries outside the city.