A six percent sales tax on sugary drinks goes into effect July 1.
The Vermont Legislature and Gov. Peter Shumlin approved the extension of the sales tax to soda and other sweet drinks as part of a tax package passed last session.
Tina Zuk, director of government relations for the American Heart Association, was an advocate for an excise tax of 2 cents per ounce on all sugar-added drinks, which was proposed as H.24 in January. That bill failed and the sales tax was added in the final days of the session.
An excise tax would have changed behavior, Zuk said, because consumers would have seen a higher shelf price for sugary drinks. Excise taxes are charged to the distributors of certain products and are rolled into the price charged to consumers, she said.
The excise tax funds — about $30 million — would have been used to combat obesity, subsidize healthier food for low-income Vermonters and improved access to places for recreation in communities.
“We’re really concerned about the obesity crisis in both the number of adults and kids, and we know that sugary drinks are a huge contributor to obesity so we wanted to discourage consumption,” she said.
Vermont has the eighth-lowest adult obesity rate in the country, according to the 2014 State of Obesity report. However, almost 62 percent of Vermont adults are overweight and/or obese and about 11.3 percent of children in Vermont ages 10 through 17 are obese, according to a 2011 survey in the report.
Jim Harrison, president of the Vermont Retailers and Grocers Association, has a different problem with the new tax.
“The Legislature made our job a little more difficult with the definition that was selected for ‘soft drinks,’” Harrison said. “Retailers are busy trying to figure out what items in their store are taxable and which ones are not.”
Exemptions to the soft drink law include items purchased with food stamps, those that contain milk, soy, rice or other milk substitutes and those that contain greater than 50 percent vegetable or fruit juice by volume, according to a Vermont Department of Taxes fact sheet. Soft drinks are considered to be nonalcoholic beverages that contain natural or artificial sweeteners.
“We certainly didn’t support the new sales tax and getting it to groceries, but the point is now that it’s passed — we need to figure out a way to get it implemented,” Harrison said. “Hopefully, our customers will be patient with their retailers as they all try to understand and better learn what items are taxable and what items are not taxable.”
Also starting Wednesday, all food and beverages sold in vending machines are subject to the 9 percent Vermont Meals and Rooms tax.
Other laws that take effect July 1
• Lobbyist disclosures: Lobbyists, lobbyist employers and lobbying firms in the Statehouse will be required to disclose expenses more often during the legislative session. As of today, all three groups will be required to file their expenditures monthly while lawmakers are in Montpelier, increasing the annual reporting dates to seven times a year. Lobbyists will also be required to report mass media purchases of $1,000 or more within 48 hours. Advertisements paid for by lobbyists that are designed to influence legislative action must also state within the ad that it was paid for by the lobbyist or lobbying firm.
• Hand-held cellphones: Effective today, it is illegal to use a hand-held cellphone while stopped in traffic, such as a stoplight. Lawmakers clarified last year’s ban on the use of hand-held cellphones while driving to include vehicles stopped in traffic. Operators may use their hand-held devices while safely parked in a legal space. The use of hands-free electronic devices, such as Bluetooth, is allowed while driving.
• Sex offenders: The responsibility for reporting information on convicted sex offenders to the sex offender registry now falls to the court system instead of the Public Safety Department.
• Solid waste law: The state will require recycling containers to be located in all public buildings and property, and solid waste haulers must offer curbside service for residential recycling. This law also implements a Pay As You Throw program where residents will be charged based on the volume and weight of the material collected from them rather than one standard fee for the service of collecting trash.
• Latin motto: The new Latin motto of the state of Vermont will be “Stella quarta decima fulgeat,” which means “May the fourteenth star shine bright,” effective July 1. The motto is a reference to Vermont being the fourteenth state of the union and used to appear on state coins.
• Indefinite ban on settlement loans: There will be a one-year ban on consumer litigation funding or settlement loans while the House Committee on Commerce revisits the issue during the next legislative session. The new law will also require Susan Donegan, commissioner of the Department of Financial Regulation, to submit a report on the litigation funding industry by Dec. 1.
• Provision to animal cruelty law: Persons who are guilty of animal cruelty now include those who own and/or use equipment and paraphernalia to train an animal’s fighting capability under the new law which will take effect July 1. Those who are found with such equipment will be subject to asset forfeiture.
• Water quality bill: Effective June 17, a 0.2 percent surcharge on property transfer tax will be implemented to raise money toward cleaning up the state’s waters and will last until 2018. The first $200,000 of property is exempt from the surcharge if the purchaser gets certain government-funded mortgages. This surcharge will be added to the current property transfer tax rate of 1.25 percent. It is expected to raise $5.3 million in fiscal year 2016.
VTDigger’s Tom Brown contributed to this report.