Sugar Sweetened Beverage Tax for Distributors
Am I A Distributor?
If you supply sweetened beverages wholesale to retailers in the City of Boulder, then you are a distributor. As a distributor, you are liable for payment of the Sugar Sweetened Beverage Product Distribution Tax (SSB Tax) on the distribution of sweetened beverages sold to retailers located in Boulder.
The topics below will help you get started on learning about this tax and your role as a distributor. Please refer to the complete list of Frequently Asked Questions for more detailed information.
Please keep checking this webpage for updates, additional content, meeting and conference call notices, and for registration and compliance information.
What Distributors Need to Know and Do
"Distribution" or "distribute" means the transfer of title or possession:
- From one business entity to another for consideration; or
- Within a single business entity, such as by a wholesale or warehousing unit to a retail outlet or between two or more employees or contractors; or
- Further definition of these terms is currently under consideration by City Council (ordinance 8184 scheduled for June 20, 2017). This would include the following: For products for which the SSB Tax tax imposed has not been paid by a prior distributer, "distribution" or "distribute" also means the placement of a product with a retailer of sugar-sweetened beverage product.
The definition does not mean the retail sale to a consumer.
Typical taxable distributions would include, but is not limited to:
- Delivery of syrup to fast food or other restaurants;
- Delivery of syrup to stores that sell fountain drinks; and
- Delivery of Bottled Sugar-Sweetened Beverage with added caloric sweeteners to retail outlets and restaurants.
- Purchase of Bottled Sugar-Sweetened Beverage or powders/syrups with added caloric sweeteners from unregistered distributors (self-distribution).
See the complete list of Frequently Asked Questions or send an email to [email protected] . Rules and guidance are currently being developed by the Boulder Sugar-Sweetened Beverage Tax Team. Please keep checking this webpage for updates, additional content, meeting and conference call notices, and for registration and compliance information.
The Sugar Sweetened Beverage Product Distribution Tax requires that all distributors of sugar sweetened beverages register as a distributor. The City of Boulder will be using current Business (Sales/Use Tax) Account Numbers for this registration system. If you are a distributor, please complete the Distributor Registration Form below. If you do not have a current City of Boulder Sales/Use Tax Account Number, you can register for a Sales/Use Tax Account Number.
Below is a suggested 2-step method for determining whether the tax applies to the distribution of a Sugar-Sweetened Beverage. It does not constitute legal advice and so legal counsel should be consulted on the applicability of the tax to the distribution of a particular beverage.
Step 1: Does the non-alcoholic beverage have at least 5 grams of caloric sweetener per 12 fluid ounces?
- If no, then the tax does not apply. (Example: This includes most diet drinks that don’t have calories.)
- If yes, proceed to Step 2.
Step 2: Sugar-Sweetened Beverage does NOT include any of the following;
- Any beverage in which milk is the primary ingredient, i.e. the ingredient constituting a greater volume of the product than any other;
- Any beverage for medical use;
- Any liquid sold for use for weight reduction as a meal replacement;
- Any product commonly referred to as “infant formula” or “baby formula;”
- Any alcoholic beverage;
- Any beverage consisting of one hundred (100) percent natural fruit or vegetable juice;
- Sweetened medication such as cough syrup, liquid pain relievers, fever reducers, and similar products.
- Any beverage that is distributed for use at the University of Colorado for consumption as part of a meal plan that includes both food and drinks from July 1, 2017 to June 30, 2018;
- Any product commonly used exclusively to mix with alcohol that may exceed 5 grams or more per serving of caloric sweetener per 12 ounces of fluid that is not a sugar sweetened beverage, including without limitation margarita mix, bloody mary mix, daiquiri mix or similar products. If no, then the tax does not apply. (Example: 100 percent fruit or vegetable juice that, by definition, don’t have added sugar because it is 100 percent fruit or vegetable.) If yes, then the tax is likely to apply.
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.
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 = 0.24cents Sugar-Sweetened Tax
- an 8-ounce bottle of Sugar-Sweetened Beverage X .02 = 0.16cents 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