The District of Columbia is increasing taxes on soft drinks as of October 1, as per a decision announced back in August.
An eight percent sales and use tax is applied for the sale or charge of soft drinks, while such drinks sold for immediate consumption will remain subject to a 10 percent sales tax.
The new regulation also expands the definition of “soft drink,” including “beverages with natural or artificial sweeteners that contains less than 100 percent juice, less than 50 percent milk, soy, rice or similar milk substitutes or coffee substitutes, coffee, cocoa or tea.”
The expanded definition was criticized by some Twitter users in terms of how the new tax will be applied.
@maustermuhle can you explain how retailers are to figure out new DC soft drink sales tax? Does a bottle of Frappucino contain more or less than 50% coffee, does a bottle of sweetened lemon tea have more than 50% tea? Poorly written code. Huge burden on business owners… pic.twitter.com/2ZxITAX4Zs
— Dennis Alloy (@dennisalloy) September 7, 2019
“We did this primarily to fund very important nutrition programs, particularly those for poor children,” says D.C. Council member Mary Cheh (D-Ward 3), who is behind the new practice.
Cheh added that the move aimed at discouraging purchase of soda and sugary drinks, and have people opt for water or another healthier alternative.
The revenue from the tax is expected to be more than $3.2 million annually, which will be used to cover the expenses of a new program that will provide $20 voucher for some residents with doctor’s prescription to get fruits and vegetables from certain supermarkets, along with free breakfasts to low-income students.