Seattle’s Soda Tax Brings in the Bucks
The city found that in spite of the tax, soda consumption appears to be rising.
Jul 29, 2019
SEATTLE—During the 18 months Seattle has basically doubled the cost of a soda 12-pack, the city brought in 49% more than forecast, the Seattle Times reports. In 2018, the city’s tax on sugary drinks went into effect, with officials estimating that soda consumption would plummet up to 40%. However, 18 months later, the city council suddenly finds itself fighting about how to spend the extra money the tax generated.
That’s because the tax raised $22.4 million, instead of the $15 million predicted. “Until we started to tax soda, sweetened beverages, we had no idea what level of consumption occurred in the city,” said Ben Noble, city budget director. “We know the level of consumption now … With a year’s worth of experience, we think we’ve got this just about right.”
With this new baseline, the city now forecasts that tax revenue will rise 8% in 2019 and will continue to increase in 2020. With the tax at a fixed 1.75-cent per ounce of sweetened fluid, more revenue means more soda consumption.
“We are selling the same sugary beverages to the same customers at the same amounts,” Todd Biesold of Merlino Foods, a wholesale restaurant distributor. “Every quarter in 2018, we were paying more and more tax, there was no letup.”
Across the country in Philadelphia, the per-ounce soda tax is generating a bit more revenue in 2019 versus 2018. Even in Berkeley, California, where researchers point to a 52% drop in consumption due to a tax on soda, the overall tax revenue has inched back up to trending stagnant.
Cash management Category Management Compliance and regulations Sustainability Taxes
