California – Bill Proposes a Sweetened Beverage Tax

SALT Report 2479 – The California State Legislature proposed a Bill that will impose a tax on every distributor who distributes bottled sweetened beverages in the state. All funds collected from this tax will be deposited in the Children’s Health Promotion Fund for use in statewide childhood obesity prevention activities and programs.

If passed, Senate Bill 622 would impose an excise tax on bottled sweetened beverages and concentrates distributed in the state using the following formula:

  • $0.01 per fluid ounce on bottled sweetened beverages, and
  • $0.01 per fluid ounce of sweetened beverages produced from concentrate, based on the largest volume produced from the concentrate according to the manufacturer’s instructions

The Bill would require all distributors of bottled sweetened beverages or concentrates to include on their receipt, invoice, or other such document, the following:

  • The distributor’s name and address,
  • The purchaser’s name and address,
  • The date of sale and invoice number,
  • The kind, quantity, size, and capacity of packages of bottled sweetened beverages, sweetened beverages, or concentrates,
  • The amount of excise tax due to the BOE from the distributor, and,
  • Any other information required by the BOE

The Bill defines “sweetened beverage” as any sweetened non-alcoholic beverage sold for human consumption that has caloric sweeteners and contains more than 25 calories per 12 ounces. This includes soda water, ginger ale, root beer, beverages referred to as cola, lime, lemon, lemon-lime, and other flavored beverages including any fruit or vegetable beverage containing less than 50% natural fruit or vegetable juice; and, all other drinks referred to as soda, soda pop, soft drinks, sports drinks, energy drinks, juice drinks, iced teas, and vitamin fortified waters.

However, neither the definition nor the tax would apply to infant formula, infant re-hydration formulas, weight gaining liquids, unsweetened water, milk or milk products, medical foods, and sweetened beverages that have more than 50% natural fruit or vegetable juice.

If passed, this bill would be effective on July 1, 2014, and expire on July 1, 2024.

The next hearing date is scheduled for May 20, 2013.

For Further Information

California State Legislature – Senate Bill 622