(360) 943-9198 info@retailassociation.org

Get ready to debate a tax on certain drinks in Seattle

May 3rd, 2017 Seattle City Council Hearing for imposing a tax on sweetened beverages

By Jim Szymanski

Some retailers in Seattle should prepare for debate on a possible tax to be imposed on various diet and non-diet soda and energy drinks.

Mayor Ed Murray is expected to ask the City Council to approve a new tax that concerned retailers estimate would add $1.36 to the price of a two-liter bottle of soft drink.

A few other cities have tried this idea, according to recent reports in The Seattle Times. The cities include Philadelphia and Berkeley, California. In Philadelphia, beverage industry employees experienced layoffs after the tax took effect. In both cities, sales of soft drinks have declined and forced consumers to change their consumption preferences.

Murray has proposed levying a 1.75 cents-per-ounce tax on beverage distributors, a cost the distributors could be expected to pass on to consumers. Murray has suggested the revenue could be used for early education programs and health programs.

Such government intervention in the marketplace often has expensive and counterproductive results.

During a protest of the idea in Seattle some weeks ago, merchants suggested that Seattle is becoming an increasingly expensive place to live and do business. Some merchants complained the city’s march toward a $15 an hour minimum wage already had led to layoffs and threats to the bottom line from ballooning payroll costs.

Murray’s idea adds more worry by increasingly the likelihood of lost sales. The Times reports sales of sodas and energy drinks declined in Philadelphia and Berkely and rose in neighboring suburbs, where prices did not include the additional tax.

Retailers with concerns should contact the Washington Retail Association’s Retail Industry Coalition of Seattle. Director John Engber can be reached either at john.engber@retailassociation.org or 206-919-0316. Reach Nina Jurczynski, Field Director, at nina@retailassociation.org.

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