Sales Tax on Bottled Water is a bad move for Vermonters

International Bottled Water Association
For Immediate Release
May 3, 2013

Sales Tax on Bottled Water is a bad move for Vermonters

Alexandria, VA – The International Bottled Water Association (IBWA) urges Vermont Governor Peter Shumlin to continue his opposition to the sales taxes included in the budget proposals recently approved by both the Vermont Senate and House of Representatives. In particular, IBWA is opposed to the current provision in House Bill 528 that would eliminate the existing sales tax exemption for bottled water.

Bottled water is a packaged food product, and as such is currently exempt from sales and use taxes in Vermont. Therefore, bottled water should be treated no differently than other food products.

It is particularly troubling that as the legislature has been debating what products to tax in order to raise revenue, new or increased proposed taxes on candy, soft drinks, dietary supplements, cigarettes and meals have all been removed from the final version of the Senate’s budget package. Of all the items that Vermont lawmakers could impose a tax upon, they have opted to burden only the healthiest – bottled water.

Such an approach to levying taxes ignores the benefits of bottled water and creates an incentive to purchase items often associated with an unhealthy lifestyle. A tax on bottled water and not on these other items sends a message to Vermonters that bottled water is a poor choice but candy, soft drinks, dietary supplements and cigarettes are acceptable to purchase and use on a regular basis.

In addition, Vermont participates in the Streamlined Sales and Use Tax Agreement (SSUTA). If Vermont enacts a tax on bottled water, it will be the only state in the United States participating in SSUTA collecting a sales tax on bottled water but no other food products. Indeed, Vermont would have to adopt a confusing and convoluted SSUTA definition for bottled water in order to tax it without taxing other food products. In fact, beyond traditional bottled water, this tax, under the SSUTA bottled water definition, would appear to include all zero-calorie flavored water, sparkling water, seltzer water, fruit water, vitamin water, and perhaps even some zero-calorie “sodas” depending on how they are formulated. IBWA is concerned that legislators are not aware of the numerous water-based beverages which would now be subject to the state’s sales tax.

A tax on bottled water would be extremely regressive and affect those who can least afford it, such as the elderly and others on fixed incomes. Taxing bottled water would also establish an unfair and inconsistent source of revenue for government funding. Once a tax is applied, sales of these products will diminish and revenue estimates based on prior sales rarely take that into account. A tax on bottled water would inevitably impact sales that would hurt retailers on the borders of Vermont and small businesses that would struggle to compete with larger establishments.

Comments

  1. James Maroney :

    The International Bottled Water Association uses hilarious reasoning to defend the sale of their product. They do not appear to understand that it is the bottle not the water that is at issue. They say bottled water is food; they say Vermont would be the only state in the country to tax the sale of bottled water as if that is reason enough not to tax it. I say ban the sale of bottled water in Vermont altogether. A few years ago the tiny town of Bundanoon in Australia, which was tired of paying to clean up plastic water bottles along its roadways, banned the sale of bottled water. The town made international news and tourism in Bundanoon rose dramatically as people sought out a place to go that was not despoiled by refuse.

  2. Karl Riemer :

    “Bottled water is a packaged food product, and as such is currently exempt from sales and use taxes in Vermont. Therefore, bottled water should be treated no differently than other food products.”

    Bottled water is a prank and should be taxed no differently from other novelty items like whoopie cushions, squirting flowers and handshake buzzers. The water is a pretense. All they’re selling is the bottle. The legislature should jump ahead of the curve and tax bottled air as well, for when Coca-Cola inevitably convinces yuppie dilettantes their lives aren’t complete until they ostentatiously carry around a bottle of ridiculously expensive air because that’s obviously better than breathing plain old free air. This isn’t a tax on food, it’s a tax on stupidity.

  3. sandra bettis :

    let’s take a lesson from our neighbors to the north and ban it all together. it’s a joke – bad for us in every way yet touted as a healthy thing.

  4. rosemarie jackowski :

    Bottled water is an absolute necessity. Not everyone has access to the municipal water supply.

    If the tax includes gallon jugs of water, it will make a good legal case. Even if only small bottles are taxed, there can be a claim of discrimination. Some elderly/disabled cannot carry a gallon. DISCRIMINATION.

    All water, even municipal water, will have to be taxed to be fair.

  5. sandra bettis :

    what did you do before bottle water??

    • rosemarie jackowski :

      Bottled water has always been available in gallon jugs… Many Vermonters have this as their ONLY source of water for drinking and cooking. Years ago, when I lived in New Jersey my well water was fine. Here in Bennington it is off the charts.

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