United States

California: Three Cities Adopt So-Called Soda Taxes

Nov 14, 2016
From KPMG TaxWatch

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On Election Day, voters in three Bay Area cities—San Francisco, Oakland, and Albany—approved ballot measures to impose taxes on soda and sugary beverages. Recall, in 2014, Berkeley, California became the first city in the U.S. to adopt a sugary drink tax. The City of Philadelphia soon followed suit. The Bay Area initiatives generally impose a one percent per ounce tax on the distribution of sugar-sweetened beverages. A sugar-sweetened beverage is a beverage that contains added sugar and has 25 or more calories per 12 ounces. These include certain soft drinks, sports drinks, iced tea, juice drinks and energy drinks. The tax would also apply to syrups and powders that can be made into sugar-sweetened beverages, for example, fountain drinks from beverage-dispensing machines.

Responsibility for the tax is on the distributors of sugar-sweetened beverages. The taxes will not apply to retail sales of these drinks. Please stay tuned to TWIST for future updates on so-called soda taxes.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.