Texas Lawmaker's Bill Puts Penny Per Ounce Tax On Sweet Drinks

February 7, 2013 - 3:04 PM

A San Antonio lawmaker has introduced a bill that would levy a penny per ounce tax on caloric sweet drinks sold in the state of Texas.

State Rep. Joe Farias filed HB 779 which would impose a $0.01 tax on each of ounce of sweetened beverages, sweetened beverage powder product and sweetened beverage syrup.

The penalty for not paying the tax on time is deemed a Class C misdemeanor and will equal 50 percent of the amount of the delinquent tax.  For example, if a retailer sold 100 ounces of sweetened beverage and failed to pay the $1.00 tax, that retailer would owe to the comptroller a total of $1.50.

The bill defines a sweetened beverage as a "carbonated or non-carbonated non-alcoholic beverage that contains natural or artificial sweeteners."  The tax will be imposed on the sale of the beverage to the retailer.

The tax will be due on or before the 25th of each month and the person responsible for the tax will keep a record of the volume of sweetened beverages sold in the state.  The record must be kept for two years.

Each retailer who wishes to sell sweetened beverages must also apply for a permit issued by the comptroller that will be renewed each year.  The bill requires each retailer to display the permit "conspicuously in the place of business to which it applies."

The bill states that, on January 1 of each year, the tax will be increased according to inflation:  The comptroller shall increase the rate of the tax by a "percentage equal to the percentage increase" in the Consumer Price Index.

Some of the exempt beverages include:

  • A beverage that is sweetened only by a sweetener that does not add calories to the beverage
  • A beverage that is 100 percent vegetable or fruit juice by volume
  • A beverage that contains more than one-half of one-percent alcohol per ounce
  • A beverage that is commonly referred to as a "sports drink'

The tax would be used to fund the "Children's Health Promotion Account" which would be used to "implement and maintain coordinated school health programs" and "improve the school health environment."

The school fund that the bill seeks to establish would use the tax revenue for such things as hiring qualified physical education teachers, implementing safe routes to school programs, improving the quality and nutrition of foods served at public schools and incorporating nutrition and health into the standard educational curriculum.

In September of 2012, New York City Mayor Michael Bloomberg banned the sale of sugary drinks in containers larger than 16 ounces in restaurants and other venues.  But, the mayor may have missed the boat on his "good intentioned" legislation.

Rep. Farias has adapted Bloomberg's anti-soda law to the state's profit, seemingly asking, "Why ban something, when you can tax it?"

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