The House today defeated a bill to repeal in phases the tax on soft drinks, a 1992 monument to Gov. Jim Guy Tucker’s administration that supports the state Medicaid program.
The bill required a two-thirds vote, but fell one short 66-27, with five not voting and two voting present. I originally said incorrectly the bill required a three-fourths vote
The powerful soft drink lobby has attacked this tax from the beginning in part for fear it could spread widely.
The vote was expunged, meaning it can be voted again.
The bill phases out the tax and was amended to begin next July 2023 rather than January. The impact would be substantial and the bill promises transfers from general revenue to make up the loss to Medicaid, where state contributions are matched better than two to one.
Fiscal Year Beginning July 1, 2023 – General Revenue Transfer $9,037,862
Fiscal Year Beginning July 1, 2024 – General Revenue Transfer $23,416,279
Fiscal Year Beginning July 1, 2025 – General Revenue Transfer $38,205,508
Fiscal Years After July 1, 2025 – General Revenue Transfer $39,437,944
You can be sure soda pop guzzlers wouldn’t feel the tax elimination, but the pocketbooks of soft drink bottlers would be fattened. And this money would be lost to other state purposes.
The tax is levied on the sale of soft drink syrup or simple syrup at the rate of $1.26 per gallon, bottled soft drinks at the rate of 20.6 cents per gallon (almost 13 12-ounce cans), and powders and base products at the rate of 20.6 cents per gallon that may be produced. Distributors, manufacturers, and wholesalers are required to collect the tax.