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Sugar Sweetened Beverage Tax

The Sugar Sweetened Beverage Product Distribution Tax is a voter-initiated tax that was adopted by Boulder voters in the November 2016 election. It places a two cents per ounce excise tax on the distribution of beverages with added sugar and other sweeteners. The tax takes effect on July 1, 2017 and revenue will be spent on health promotion, general wellness programs and chronic disease prevention that improve health equity, and other health programs especially for residents with low income and those most affected by chronic disease linked to sugary drink consumption. For more details regarding the tax, please see City of Boulder Sugar Sweetened Beverage Product Distribution Tax. pdf

NEW - Exemption/Redistribution Fillable Form pdf

The topics below will help you learn more about this tax. Please refer to the complete list of Frequently Asked Questions pdf for more detailed information. 

The Sugar Sweetened Beverage (SSB) Tax At A Glance

SSB Tax Overview

What is the Sugar Sweetened Beverage Product Tax (SSB Tax)?

The SSB Tax, often nicknamed the “sugar tax” or “soda tax,” is NOT a sales tax charged directly to the consumer. Instead, this excise tax makes distributors of sugar-sweetened beverages pay a tax applied to the drinks they distribute within the City of Boulder. The drinks that are subject to the tax contain at least 5 grams of added caloric sweeteners (such as sugar and high-fructose corn syrup) per 12 fluid ounces. This definition includes products like soda, energy drinks and heavily pre-sweetened tea, as well as the syrups and powders used to produce them, such as the boxed syrup used to make fountain drinks. Certain drinks such as infant formula, milk products, alcoholic beverages, alcoholic mixers and 100 percent natural fruit and/or vegetable juice are exempt. 

Who is responsible for paying the SSB Tax?

The distributor of sugar-sweetened beverage products is responsible to pay the tax imposed on each non-exempt distribution of a sugar-sweetened beverage product in the city. If there is a chain of distribution within the city involving more than one distributor, the tax is levied on the first distributor subject to the jurisdiction of the city. If the tax is not paid by the first distributor for any reason, it is levied on subsequent distributors, provided that the distribution of sugar-sweetened beverage products may not be taxed more than once in the chain of commerce within the city. The City’s interpretation of the definition of “distribution" includes retailers obtaining and bringing the beverages into the City themselves (“self-distributors”). The Boulder City Council is currently considering amendments to the ordinance that will further define and clarify “distribution” to include various self-distribution scenarios 

Distributors are free to pass the added cost of the SSB Tax on to retailers. Likewise, retailers may or may not pass the cost along to their consumers. 

When does the tax take effect?

The tax takes effect on July 1, 2017. Taxes are due monthly. The first return is due Aug. 21, 2017 and on the 20th of every month after that. Those who fail to file their returns and remit tax payments will be subject to enforcement action.

What is the tax rate and how is it calculated?

The tax rate is two cents ($0.02) per fluid ounce for ready-to-consume, liquid sugar-sweetened beverage products. However, the tax on added “caloric sweeteners” in the form of syrups and powders is calculated on the maximum volume, in fluid ounces, of beverage that the syrup or powder can produce based on the manufacturer’s instructions. While the ordinance requires the tax to be paid on the first non-exempt distribution in the City, if it is not paid at that time, it is payable on the next (or any subsequent) distribution, provided that no taxable product may be taxed more than once.

For Sugar-Sweetened Beverages;

  • Number of ounces of Sugar-Sweetened Beverage X Tax Rate = Sugar-Sweetened Beverage Tax
  • For example;
    • a 12-ounce can of Sugar-Sweetened Soda X .02 = 24 cents ($0.24) Sugar-Sweetened Tax
    • an 8-ounce bottle of Sugar-Sweetened Beverage X .02 = 16 cents ($0.16) Sugar-SweetenedTax

For Syrups or Powders;

  • The manufacturer’s suggested serving size for the volume of fluid ounces of sugar-sweetened beverages produced from syrup or powder upon the initial distribution of syrup or powder; or
  • If the labeling or packaging does not specify the recommended number of servings per container, the tax shall be calculated using the largest volume of fluid ounces of sugar-sweetened beverages that could be produced from syrup or powder upon the initial distribution of syrup or powder.

    For Example - a 750ml bottle of flavored syrup has 20 grams of sugar per one ounce serving and there are 25 servings in the container.
    • 25 servings X 12 ounces (one serving size) = 300 ounces of SSB
    • 300 ounces X .02 (SSB tax rate) = $6.00 SSB Tax

 

Where will the revenue go?

According to preliminary estimates, the tax is expected to generate roughly $1.5 million in 2018. But where will that money go? According to the ballot measure, funds generated from the tax must be used to improve health equity in Boulder through the support of health promotion, general wellness programs and chronic disease prevention. Additionally, the funds will cover the administrative cost of the tax. For 2017, the city hopes to improve health equity by initially investing in existing programs and then exploring innovative partnerships and programs. These efforts will focus on health promotion and chronic disease prevention efforts designed for community members most at risk, access to safe and clean drinking water, and physical activity.

The City of Boulder’s Health Equity Advisory Committee (HEAC) is a nine-member committee appointed by the city manager to review Sugar-sweetened Beverage Product Distribution Tax (SSBPD Tax) funding proposals and make recommendations to staff and the city manager for programmatic funding. The role of the committee is advisory and technical, not political in nature, and members do not serve in an advocacy role for either agencies or issues. Committee members provide technical and professional expertise and lived experience to assist with the allocation of funding for the most effective ways to address health equity and chronic disease associated with sugary drink consumption.

For more information, please visit the HEAC webpage

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