Seattle Soda Tax Collection Exceeds Expectations

Added tax on sweetened beverages may not be reducing consumption.

July 12, 2018

SEATTLE, Washington — Apparently, many people in Seattle don’t care to give up their soft drinks. In its first three months, the city’s new sweetened beverage tax has generated almost $1 million more than originally predicted, according to U.S. News.

A local TV station reported that the tax brought in $4,446,000, a jump above the $3.7 million expected in a single quarter.

The tax on soda, sports, energy drinks, sugary coffee drinks and sweetened iced teas went into effect on Monday, Jan. 1. Shoppers pay an extra 1.75 cents per ounce on sweetened beverages. For a 20-ounce bottle of soda, they must shell out an extra 35 cents.

A spokesperson for the county health department said it's too early to know if the tax is having its intended effect of reducing consumption of sweetened beverages. According to lawmakers, the tax is an effort to prevent obesity and diabetes as opposed to collecting tax money.

The law mandates how the tax money will be spent. In the first year, 26% will go to healthy food options for low-income individuals and 24% to family child-care programs. Additional amounts are earmarked for other areas, including first year college tuition for Seattle high school graduates.

America’s first soda tax appeared in 1917, passed by Congress as a luxury tax to help fund World War I. Opponents of the tax complained that the one-cent levy was too complex and cumbersome to collect, and eventually drugstore owners organized a new Soda Fountain Association to lobby for repeal, according to Tax Analysts. Congress soon yielded to its critics and ended the soda tax in 1922.

Today’s pushes for a soda tax are a different sort than 100 years ago. For more on this topic read NACS Magazine’s “A Costly Pour.”