Berkeley, California, the birthplace of liberal nanny-state policies like smoke-free restaurants and curb cuts for wheelchair access, got a lot of ink last week for passing the nation’s first “soda tax.”
With the support of three-quarters of its voters, Berkeley will impose a tax of 1 cent per ounce on sugar-sweetened beverages.
Berkeley’s tax may well be the first of its kind — a retail tax paid at the checkout. But soft drinks have been taxed at the wholesale level in Arkansas for two decades.
Old-timers will remember that, to raise money for Medicaid, the Arkansas General Assembly in 1993 hid a wholesale tax on soft drink syrup. The tax rate is the equivalent of 2 cents per 12-ounce serving.
That tax routinely generates more than $40 million a year, according to data from the Arkansas Department of Finance & Administration. Collections peaked at $48.8 million in the fiscal year that ended June 30, 2007. In fiscal 2014, the state collected $44 million, the lowest level since 2004, and is on track for about $45 million in the fiscal year that began July 1.
Meanwhile, back in California, a small majority of San Francisco voters favored a tax similar to Berkeley’s but twice as big — 2 cents per ounce. The proposal failed because it didn’t get the supermajority vote needed for approval.
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