BURLINGTON – Beginning July 1, Vermont residents can expect to pay more when they get the urge to snack, with the introduction of a new 6% sales tax on soft drinks and a 9% meals tax on vending machine items.

The taxes are part of a $30 million package of tax increases that took effect this month, intended to help close a total $113 million gap between projected state spending and revenue. The sales tax on soft drinks is estimated to generate $7.9 million in revenue, while extending the meals tax to vending machines is estimated to yield $1 million.

One controversial aspect of the new law is that customers who use food stamps are exempt from the sales tax on soft drinks. Many are saying that those consumers who use food stamps now have no incentive to make healthier choices and goes against the initial intention of soft drink tax, which was to discourage consumption of unhealthy products.

The vending machine tax applies only to items sold in the machines, not to those same items if purchased elsewhere, such as a grocery store. According to local news reports, the tax department has been conducting outreach to notify businesses about the new taxes, but word had failed to reach everyone in time.
The Vermont Retailers and Grocers Association has also played a leading role in notifying businesses of their obligation to collect the new taxes, inviting members to participate in webinars on the tax change. A guide to the Vermont sales tax on soft drinks is available at http://bit.ly/vtdrinktaxes.