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Posted at 07:49 PM ET, 05/25/2010

Gray aims to extend sales tax in place of fizzled soda tax

Plans for a citywide tax increase on soda in the District haven't fallen flat after all.

Last week, Council Chairman Vincent C. Gray pulled the plug on a proposal by Council member Mary M. Cheh (D-Ward 3) to assess a 1-cent-per-ounce tax on soda. Diet sodas would have been excluded.

But in a last-minute effort to balance the city's budget, Gray has included another form of beverage tax in his recommended fiscal year 2011 budget, the Washington Post has learned.

The revised proposal, which comes despite fierce opposition from the beverage industry, would extend the city's 6 percent sales tax to sodas and other "non-alcoholic beverages with natural or artificial sweeteners." Such beverages currently are excluded from the sales tax because they are considered grocery items.

The proposal, which will be voted on by the council Wednesday, would generate about $8 million in revenue. About $6.5 million would be used to fund Cheh's Healthy Schools initiative, which requires city schools serve more fresh fruits and vegetables to students. The remainder of the revenue would go into the general fund.

The current proposal would add about 10 to 12 cents on the bottle of a two-liter of soda. Cheh's initial proposal would have increased the cost of a two-liter by about 67 cents.

--Tim Craig

By Christopher Dean Hopkins  |  07:49 PM ET, 05/25/2010

Categories:  D.C. Council, D.C. Council, D.C. Council

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