An ACT concerning the implementation of an excise tax on sugar sweetened beverages that have a negative effect on the safety, health, and welfare of New Jersey residents.

  • Posted on: 6 March 2020
  • By: Hannah Shahinian
Legislature: 
Primary Chamber: 
Title: 
An ACT concerning the implementation of an excise tax on sugar sweetened beverages that have a negative effect on the safety, health, and welfare of New Jersey residents.
Enactment Clause: 
Be it enacted by the Youth Model Legislature of the State of New Jersey that an excise tax of one point five cents ($0.015) per fluid ounce of sugar sweetened beverage products that are distributed in New Jersey shall be levied, paid, and collected for the intended purpose of decreasing the level of sugar sweetened beverage consumption to a more healthy amount. This tax is imposed when the acquisition, supply, or transport of sugar sweetened beverages is for retail sale of these products within New Jersey.
Sections: 
Section I: Defines: “Sugar Sweetened Beverage” as a non-alcoholic beverage that contains at least 5 grams of caloric sweetener per 12 fluid ounces. Includes all beverages commonly referred to as “soda,” “pop,” “cola,” “soft drinks,” “sports drinks,” “energy drinks,” “sweetened iced teas,” “sweetened coffees,” or any other common names that are derived from the listed names. “Sugar Sweetened Beverage” does not refer to any of the following: Baby formula. Any product with a volume of more than fifty percent milk. Any product intended for use in medical purposes. Any product with a volume of more than fifty percent fruit and/or vegetables. “Product used for medical purposes” as A source of required nutrition as a result of a medical condition, or A source of re-hydration for children and infants used to prevent or treat dehydration due to illness or a medical condition. This definition does not include drinks referred to as “Sports Drinks” or any other similar names. “Caloric Sweetener” as an edible substance or mixture of substances that adds calories and is considered to be sweet. Such substances include, but are not limited to, sucrose, fructose, glucose, corn syrup, and high-fructose corn syrup. “Bottled Sugar-Sweetened Beverage” as any type of sugar-sweetened beverage in a premade container that is ready to be consumed without any additional processing, including, but not limited to, dilution and carbonation. “Powder” as any solid combination of one or more caloric sweeteners intended to be used to make a sugar sweetened beverage by mixing it with one or more additional ingredients. “Syrups” as any viscous liquid combination of one or more caloric sweeteners intended to be used to make a sugar sweetened beverage by mixing it with one or more additional ingredients. “Distribution” or “distribute” as the transfer of possessions: From one business to another; Within a single business, including but not limited to, from a warehousing unit to a retail unit; That are taxed products that have not yet been paid for by a previous distributor; “Distribution” or “distribute” additionally refers to the transferring of a product to a retailer of sugar sweetened beverage products; “Distribution” or “distribute” does not refer to a retail sale to a customer. “Distributor” as any person or entity who distributes sugar sweetened beverage products in the state. “Sugar Sweetened Beverage Product” as a bottled sugar sweetened beverage or a sugar sweetened beverage created by diluting syrup or powder.
Section II: The tax shall be calculated: For bottled sugar-sweetened beverages, the tax shall be calculated based on the volume, in fluid ounces, of the products distributed in New Jersey. For a sugar-sweetened beverage made from syrups and powders, the tax will be calculated based on: The manufacturer's suggested serving size, at the time of distribution, for the amount of fluid ounces to be mixed with such syrups and powders to create a sugar-sweetened beverage. If there is no serving size specified, the tax shall be calculated using the largest volume of fluid ounces of sugar sweetened beverages that could be made using the syrup or powder based on the definition of sugar sweetened beverages.
Section III: Every distributor of sugar sweetened beverage products shall pay the aforementioned tax on each sugar sweetened beverage product distributed in New Jersey. An excise tax of one point five cents ($0.015) per fluid ounce of sugar sweetened beverage products shall be levied, paid, and collected in New Jersey. The established tax is a tax on the distribution of sugar sweetened beverage products within New Jersey. This tax is not a sales, use, or any other type of excise tax. This tax will be paid in addition to any preexisting tax or license fee established by any other law, statute, or ordinance imposed by the state or any other governmental body.
Section IV: Once all of the administrative costs of the tax have been paid by the earnings, the remainder of the earnings will go towards the New Jersey Department of Environmental Protection in order to help them improve water infrastructure and provide clean water to low income families.
Effective Date: 
If enacted, this law shall take effect on January 1, 2021.
Statement of Intent: 
The purpose of this bill is to promote health and wellness among the population of New Jersey. New Jersey is facing a health crisis as diseases caused by unhealthy eating habits such as obesity, diabetes, and heart disease run rampant through the population. In fact, between 2001 and 2015, New Jersey’s obesity rate increased from 19.6% to 25.8%. In 2018, the adult obesity rate had only decreased slightly to 25.7%, showing a need for proper change. In addition, other diseases related to obesity run rampant in New Jersey, harming the health and wellness of New Jersey residents. For example, the adult diabetes rate in New Jersey was as large as 10.4% in 2018. Also, in 2010, there were 398,981 cases of heart disease in New Jersey with a staggering amount of 2,087,173 cases projected for 2030 if this trend continues. This bill will work to lower these concerning rates of obesity and obesity related medical conditions by hopefully dissuading people from buying as many sugar-sweetened beverages on a daily basis. Though this tax is not a sales tax, it will likely have the effect of making distributors increase the prices of sugar sweetened beverage products, making them ultimately cost more when they reach the consumers. This raised price will make the health-harming sugar sweetened beverage products seem less appealing and make it harder for residents of New Jersey to consume an unhealthy amount. The negative health effects of sugar sweetened beverages are plain to see, as recent scientific knowledge links the consumption of such beverages to health conditions like obesity, diabetes, and heart disease. This correlation can be seen, as consuming one sugar sweetened beverage a day causes the risk for childhood obesity to increase by a whopping 55%. In addition, consuming one sugar sweetened beverage a day increases the risk of getting Type Two Diabetes by an alarming 25%. Moreover, consuming one sugar sweetened beverage a day also increases the probability of death from cardiovascular disease by 30%. Therefore, it can be clearly seen that the overconsumption of sugar sweetened beverage products is one of the leading factors in New Jersey’s obesity epidemic. Thus, it would be beneficial to the health and wellness of New Jersey residents to establish the aforementioned excise tax on these harmful products with the intention of encouraging them to drink fewer sugar sweetened beverage products.
Author's Note: 
This bill will not need much funding. It will only need funding for administrative processes such as collecting, monitoring, and enforcing the tax in pre-existing systems. The addition of this new tax will mean that either new workers will need to be hired or pre-existing workers will need to be paid more, hence the slight need for funding.
Lobbyist Consideration: 
Yes
Fund Summary: 
The earnings from this excise tax will be used to pay the administrative cost of collecting, monitoring, and enforcing the tax along with any other needed costs relating to the tax. Any additional funds generated as a result of this bill will go to the New Jersey Department of Environmental Protection in order to help them improve water infrastructure and provide clean water to low income families. The implementation of this law will fall under the jurisdiction of the New Jersey Department of Environmental Protection.
Speedpass Consideration: 
No
Thinktank Consideration: 
No