PROPOSITION V – BUSINESS AND TAX REGULATIONS CODE – ONE CENT PER OUNCE TAX ON THE DISTRIBUTION OF SUGAR BEVERAGES
Placed on the ballot by the Board of Supervisors
Requires a simple majority vote for passage
Should the voters impose a tax on the distribution of some sugar-sweetened beverages?
To discourage consumption of sugar- sweetened beverages, the White House Task Force on Childhood Obesity recommends that local governments implement a tax for such calorie-dense, nutrient-poor food and beverages. The City of San Francisco does not impose a tax on sugar-sweetened beverages.
Proposition V would place a tax of one cent per ounce on the distribution of sugar-sweetened beverages. The distributors of sugar-sweetened beverages in San Francisco would be responsible for paying the tax. The tax would not apply to retail sales of sugar-sweetened beverages.
A sugar-sweetened beverage is a beverage that contains added sugar and 25 or more calories per 12 ounces. These include some soft drinks, sports drinks, iced tea, juice drinks and energy drinks. The tax would also apply to syrups and powders that can be made into sugar-sweetened beverages, for example, fountain drinks from beverage-dispensing machines.
Beverages that are not subject to the tax include:
- Diet sodas;
- Beverages that contain only natural fruit and vegetable juice;
- Infant formula;
- Milk from animal or vegetable sources, including soy, rice and almond milk;
- Nutritional therapy, rehydration and other beverages for medical use; and
- Alcoholic beverages.
A 16-member Advisory Committee would be established to evaluate the impact of the tax on beverage pricing, consumer purchasing behavior, and public health. The Committee would also advise the Mayor and Board of Supervisors about how to reduce the consumption of sugar-sweetened beverages in San Francisco. The City could use the proceeds of the tax for any governmental purpose.
A “YES” Vote Means: If you vote “yes,” you want the City to collect a tax of one cent per ounce from the distributors of sugar-sweetened beverages.
A “NO” Vote Means: You do not want the City to collect a tax of one cent per ounce on the distribution of sugar-sweetened beverages.
ARGUMENTS IN FAVOR OF PROP V:
- Cigarette taxes have significantly reduced smoking, so a soda tax would reduce consumption of sodas and other sugary beverages. The diabetes epidemic reportedly contributes to $61 million in related health care costs in San Francisco.
- Mexico instituted a soda tax and consumption has dropped 12-17%; San Francisco’s consumption is estimated to drop as much as 31% with a similar tax.
- This tax can help address an emerging health crisis, especially in low-income communities and communities of color, where 1 in 3 children today will develop Type II diabetes.
ARGUMENTS AGAINST PROP V:
- A soda tax is a simplistic and ineffective solution to a very real and complex problem. Calories in soda are no more or less fattening than calories in other food.
- A soda tax will hurt small neighborhood stores that rely on soft drinks for much of their revenue. The tax on the distributor will be passed onto the customer.
- This proposed ordinance is paternalistic. Individuals should be able to choose what they eat or drink.
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