SOFT DRINKS SYRUP TAX

82.64.030(1) SUCCESSIVE POSSESSION

Description: This exemption exempts successive sales of concentrated syrup used to produce carbonated beverages from the syrup tax, thereby assuring that the tax is paid only once on a specific product.

Purpose: To avoid taxing the same product twice.

Category/Year Enacted: Not intended in the tax base; 1989.

Primary Beneficiaries: Retailers and wholesalers of carbonated beverages who use syrup.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
State taxes 9,068 9,068 9,249 9,249
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized? Unlikely; there would be substantial double taxation of the same product without this exemption and this is not intended.

 

82.64.030(2) EXPORTED SOFT DRINKS

Description: Exemption is allowed for soft drink syrup that is shipped out of state.

Purpose: To limit the tax to syrup used for soft drinks that are consumed within Washington.

Category/Year Enacted: Not intended in the tax base; 1989.

Primary Beneficiaries: Bottlers and wholesalers of carbonated beverage syrup.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
State taxes 1,170 1,170 1,193 1,193
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized? Yes, although the tax is intended to apply only to products consumed in-state.

 

82.64.030(3) TRADEMARKED BEVERAGES

Description: This subsection of the statute exempts the wholesale sale of trademarked soft drink syrup to bottlers who are licensed to bottle the trademarked beverage. Thus, the tax will instead be paid by the next purchaser of the syrup, either a wholesaler or retailer.

Purpose: To shift the tax from the bottler to the wholesaler so that the incidence of the tax is consistent with other sales of carbonated beverage syrup.

Category/Year Enacted: Not intended in the tax base; 1991.

Primary Beneficiaries: Bottlers of trademarked beverages.

Conflict with Other Programs: None evident.

Tax Savings ($000): None; the tax incidence is simply shifted to the next purchaser.

 

82.64.030(4) PRIOR POSSESSION

Description: This exemption restricts the soft drinks syrup tax to the wholesale level, if the previous first possession tax has already been paid before June 1, 1991.

Purpose: In 1991 the nature of the carbonated beverage tax was changed so that the wholesale transaction was taxed rather than the first possession of the product. This exemption precludes double taxation of the same product if the prior tax was paid but the product was not sold at wholesale until after the change in the law. Thus, the purpose is to maintain revenue neutrality.

Category/Year Enacted: Not intended in the tax base; 1991.

Primary Beneficiaries: Manufacturers of soft drinks who paid the first possession tax.

Conflict With Other Programs: None evident.

Tax Savings ($000): None; this exemption is no longer applicable.

 

82.64.040 CREDIT FOR OTHER TAXES

Description: Allows a credit for the amount of any taxes similar to Washington's soft drinks syrup tax that is paid in other states.

Purpose: To avoid double taxes on the same product.

Category/Year Enacted: Commerce; 1989.

Primary Beneficiaries: Importers of soft drinks or concentrated syrup.

Conflict With Other Programs: None evident.

Tax Savings ($000): Minimal; other states with similar taxes on carbonated beverage syrup typically have an exemption for exported soft drinks or syrups.