What is soda tax?
While no state currently taxes sweetened beverages, several localities levy what’s commonly referred to as a “soda tax.” Six local governments levy a per volume excise tax on drinks sweetened with sugar and one government levies a per volume tax on all sweetened drinks.
First initiated in 2015 in Berkeley, California, a one-cent-an-ounce tax was imposed for soft drinks, including soda, energy drinks, and sweetened ice teas. Thus, the tab for a 64-ounce bottle of Coke or Pepsi will cost an extra 64 cents, before any other price increases by retailers. It’s estimated that costs will rise as much as ten percent.
When it was first proposed, advocates of the Berkeley tax said the fee would help curb consumption of sodas, energy drinks, and sweetened iced teas, beverages they believed contributed to the nation's obesity epidemic.
Today, only ten localities levy excise taxes on sugary drinks in the U.S:
• Berkeley, California
• Philadelphia, Pennsylvania
• San Francisco, California
• Oakland, California
• Albany, California
• Boulder, Colorado
• Cook County, Illinois
• Portland, Oregon
• Seattle, Washington
If the primary goal of a sugary drink tax is improving public health by reducing sugar consumptions, governments might want to consider taxing a beverage’s sugar content. Taxing sugar content may encourage consumers to choose lower-sugar options and persuade manufacturers, distributors, and retailers to stock and market healthier options.