Controversial Soda Tax Banned in California

New bill prohibits city and county soda taxes for a dozen years.

July 19, 2018

SACRAMENTO – Thanks to a compromise with the beverage industry, California Gov. Jerry Brown has signed a bill banning cities and counties from taxing sodas and other sugary drinks within the state, according to U.S. News

The legislation, which prohibits new soda taxes for the next 12 years, came after a compromise agreement between opponents of the tax, many of them in the beverage industry, and state officials.

The beverage industry has spent a reported $7 million in support of an initiative on the Nov. 6 statewide ballot that would stop the state from raising taxes without a supermajority vote of local citizens and from increasing certain fees without a two-thirds vote of the legislature. Within minutes of the state’s banning of future soda taxes, opponents withdrew the initiative that would have made tax increases more difficult to approve.

In November 2014, Berkeley became the first California city to adopt a soda tax - one penny per ounce. Since then, three other municipalities—San Francisco, Oakland and Albany—have passed soda taxes. The new tax ban won’t impact those existing laws, but it prohibits other cities from adopting new soda taxes. Santa Cruz city officials recently voted to put a soda tax referendum on the November ballot, but that effort is prohibited under the new law.

Lawmakers in Michigan and Arizona have signed similar bills barring cities from levying soda taxes, but there is still a strong interest around the country in taxing sugary drinks.

As NACS Daily reported recently, beverage industry officials believe that they can work jointly with health advocates and the state government to help reduce sugar consumption, while protecting consumers’ finances and small businesses.

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