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By Gallons Or Fluid Ounces, Oregon, Texas And Rhode Island Lawmakers Propose Soda Taxes

Posted On: 2/11/2013

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TAGS: soda vending, soda vending machines, soda taxes, sugar drink taxes, taxes on sweetened beverages, Joe Farias, HB 735, Texas Merchandise Vending Association, National Automatic Merchandising Association, House Bill 5228, sugar-sweetened beverages, Center for Consumer Freedom, anti obesity, Northwest Automatic Vending Association

Sugary beverage taxes have been introduced in at least three states as Legislatures across the country begin their 2013 sessions.

Texas state Rep. Joe Farias (D-San Antonio) wants a penny-per-ounce tax on sugary-sweetened beverages and the ingredients used to make them. The funds would go to the state's new Children's Health Promotion Account, established to fund school health and physical recreation programs.

Farias's proposed bill, designated HB 735, defines a sweetened drink as "a carbonated or noncarbonated nonalcoholic beverage that contains natural or artificial sweeteners," regardless of package size or retail venue. Certain types of sports drinks, fruit and vegetable juices, infant formula, milk products and diet beverages would be exempt from the tax, which would increase annually based on inflation levels. He filed similar legislation last session, but it failed to receive a committee hearing.

The Texas Merchandise Vending Association and the National Automatic Merchandising Association recently lobbied against the new bill.

In Rhode Island, State Reps. Edith Ajello (D-Providence), Arthur Handy (D-Cranston), Teresa Tanzi (D-Wakefield), Maria Cimini (D-Providence) and Larry Valencia (D-Charlestown) have introduced House Bill 5228, which would add a $1.28 per gallon tax to any soft drink, powder or syrup beverage sweetened with sugar.

The bill lists sugar-sweetened beverages as any "nonalcoholic beverage ... containing sugar, corn syrup or any other high-calorie sweetener including ... sodas, sports drinks or energy drinks." Revenue will be allocated to obesity prevention programs.

The bill has generated some opposition. The Center for Consumer Freedom, a watchdog group, argues that multiple studies have demonstrated that soda is not a unique contributor to obesity.

In Oregon, a bill would impose an excise tax at the first sale in the state of a sugar-sweetened beverage or concentrate by a distributor, sugar-sweetened beverage manufacturer or concentrate manufacturer doing business there. It's sponsored by state Reps. Mitch Greenlick (D-Portland), Carolyn Tomei (D-Milawaukie), Jules Bailey (D-Portland), Peter Buckley (D-Ashland), Joe Gallegos (D-Hillsboro) and Alissa Keny-Guyer (D-Portland).

The measure proposes to tax sugar-sweetened beverages at a rate of $0.005 per fluid ounce. For concentrate, the tax is calculated at $0.005 per fluid ounce for each gallon of sugar-sweetened beverage produced. Both rates automatically increase in line with the Consumer Price Index.

The proposed legislation defines a distributor as: "a person that (a) imports or causes to be imported into this state for use, distribution, bottling, storage or sale of any sugar-sweetened beverage or concentrate or (b) bottles sugar-sweetened beverages or concentrate."

Sugar-sweetened beverage are categorized in the proposed legislation as nonalcoholic drinks that contain caloric sweeteners and "all drinks and beverages commonly referred to as a cola, ginger ale, lime, lemon, lemon-lime, root beer, soda, soda pop, or soft drinks." Beverages sweetened with non-caloric sweeteners, bottled water, 100% natural fruit or vegetable juice and dairy beverages are exempt from the proposed tax.

The Northwest Automatic Vending Association said it plans to lobby against the bill on Feb. 12 during its legislative day in Salem, OR.

Meanwhile, New York City's first-in-the nation ban on large-size beverages is set to take effect next month, amid fierce industry opposition and a legal challenge by soda makers, sellers, restaurateurs and other businesses. | SEE STORY