A Texas state representative is calling for a new tax on the sale of sugary and high calorie beverages in order to fund new public health initiatives aimed at curbing rising obesity rates and related health problems.
Rep. Joe Farias (D-San Antonio) filed a proposal that would add a $0.01 per ounce tax on “certain sweetened beverages and ingredients used to make certain sweetened beverages” that would be used to support the state’s newly created Children’s Health Promotion Account. The fund was established to support school health and physical recreation programs throughout the state.
Much like New York City’s restrictions on the on-premise sale of large format sugary drinks, the tax – which would increase annually based on inflation levels – would target only non-alcoholic beverages. However, Farias’ proposed bill defines a sweetened drink as “a carbonated or non-carbonated nonalcoholic beverage that contains natural or artificial sweeteners” regardless of package size or retail venue. Some products including certain types of sports drinks, fruit and vegetable juices, infant formula, milk products and diet beverages would be exempt from the tax.
The bill would require manufacturers, distributors and wholesalers that sell or import sweetened beverages in Texas to obtain an annual permit to sell sweetened beverages. The businesses would be responsible for paying the tax once a month and filing a detailed sales report with the state comptroller’s office. Businesses that failed to pay the tax or file a report would be subject to “a penalty of 50 percent of the amount of the delinquent tax.”
This is not the first time Farias has attempted to launch a tax on sweetened drinks. He filed similar legislation in 2011, issuing a press release stating that “taxation can be an effective way of reducing soft drink consumption, and, ultimately, obesity.” The statement noted a Yale University study which indicated that for every 10 percent increase in price, consumption decreases by 7.8 percent.