New Soda-Tax Plan From Paterson

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Gov. David Paterson’s administration unveiled a new proposal Thursday that would eliminate sales tax on low-calorie soda and bottled water, which would widen the gap in price between sugary beverages and healthier beverages, state Health Commissioner Richard Daines announced today.

The proposal, Gannett’s Jon Campbell reports, would tweak Paterson’s initial push for a penny-per-ounce tax on sodas and sugary drinks, which was included in his 2010-11 budget proposal. Both the Senate and the Assembly rejected the tax in their budget plans.

The new proposal would levy both a state and local sales tax on bottled coffee and tea drinks if they contain more than 10 calories per eight ounces. All coffee and tea drinks – bottled or otherwise – are currently exempt from sales tax.

“It gives a big advantage to the (low- or no-calorie) drinks in the marketplace, and widens the difference so actually the sugar beverages will be 24 or 25 percent more expensive,” Daines said. “I think we get a better health benefit from it.”

Senate Democrats, however, were quick to reject the proposal.

“While we applaud the effort to reduce health risks, we want to provide New York’s families with tax relief, not add to their burden,” said Austin Shafran, spokesman for the Senate Democrats.

If the proposal makes it through the Legislature, the state would reimburse local governments for lost sales tax from the healthier drinks at an estimated cost of $54 million. Paterson’s staff estimated the soda tax would bring in $815 million with the new tweaks, down from $1 billion with the original proposal.

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