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NY Governor Reconsiders Soda Tax Strategy

Posted On: 5/27/2010

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New York soda tax, beverages, vending, vending machine, vending machine business, vending industry

ALBANY -- Gov. David Paterson is hoping to win over New York's lawmakers by cushioning the blow of his proposed soda tax to the beverage industry by adding a state sales tax exemption on diet sodas and bottled water.

Under the new proposal, consumers would pay an extra penny per ounce on sugared beverages, but if they bought diet sodas or bottled water, they would avoid that tax and the sales tax as well.

The state Senate and Assembly have been opposed to the original penny-per-ounce tax on sugary sodas, which was expected to bring in $1 billion a year in revenue to help close the state's $9 billion budget gap. But, according to The New York Times, the Paterson administration appears willing to settle for the $815 million a year the new proposal would generate. Officials hope that the exemption for diet drinks and water will lead beverage companies to relax their opposition, and that lawmakers might follow along.

Representatives of the beverage industry said they wanted to know more about the plan, the newspaper reported, but they were not quick to embrace the concept, arguing that people who like sugared sodas will not easily switch to those with artificial sweeteners simply to avoid paying a tax.