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Soda taxes will up holiday cookout costs in a few cities

July 2, 2017

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Millions of Americans will be enjoying picnics and cookouts in advance of July 4 fireworks. In a few places, though, the sodas in those outings' coolers will cost a bit more.

So-called soda taxes took effect in Oakland, California, and Boulder, Colorado, on July 1. A similar levy was scheduled in the Chicago area, but the day before a judge put Cook County's penny-per-ounce tax on sweetened beverages on hold at least until July 12.

Bay Area beverage battle: Oakland voters approved the tax, which applies to more than soda pop, in November 2016. The added tax, say supporters, should discourage some consumers, especially younger beverage buyers, thereby helping to improve residents' health.

In addition, argue opponents of sweetened beverages, the added revenue will "offset the extra costs borne by society for extra medical and dental care, waste, pollution and even greenhouse gases associated with the production of sugary drinks."

Higher tax in Rocky Mountain state: Boulder's tax, officially known as the Sugar Sweetened Beverage Product Distribution Tax when it was approved by voters last November, is 2 cents per ounce. It's projected to generate close to $4 million during its first full year.

Since Boulder's sweetened beverage tax is the steepest (so far), those 2 pennies earn this week's By the Numbers figure.

As in Oakland, Boulder's new soda tax money will be spent on promoting healthy eating (and drinking) habits and general wellness programs and chronic disease prevention efforts, particularly those designed to help low income residents.

8 cities target sugary drinks: In addition to Oakland, Boulder and pending Cook County soda taxes, similar beverage levies have been passed via ballot initiatives or local legislative bodies and already implemented in Berkeley, San Francisco and Albany, California; Philadelphia, Pennsylvania; and Seattle, Washington.

We can debate which lawmakers are more worried about, the health of their constituents or bank balances. But what is agreed upon by most is that sin taxes can be complicated, confusing and sometimes downright illogical. That's evidenced by the way the soda taxes parse just what drinks are and aren't taxable.

And it seems that in too many cases, soda and other taxes targeting bad habits ultimately do little for a taxing jurisdiction's overall revenue.

That financial reality, however, won't likely stop cities, many of which are in as dire fiscal straits as their states, from looking to soda taxes as an alternative revenue stream.

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It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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