As of Jan. 1, 2018, the city of Seattle added a sweetened beverage tax on certain beverage products distributed within the city.
How does this affect you as the distributor and retailer?
Sweetened beverages distributors need to report and pay the tax. A distributor is any person that distributes sweetened beverages in the city to a retailer or customer. Distributors may choose to pass this cost on to their customer (retailer). If so, this additional amount becomes part of the gross selling price and is subject to wholesaling B&O tax.
In addition, if the distributor passes the cost to the retailer, the retailer may also choose to pass the cost on to their customers. If so, this additional amount becomes part of the gross selling price, and the retailing B&O tax and retail sales tax must apply to that amount.
How does this affect you as the consumer?
The sweetened beverage tax is a tax on the distributor, not the consumer. However, if the retailer passes the cost of the tax on to you, you will pay sales tax on the increased amount whether or not it is separately itemized.
What is a sweetened beverage?
The term sweetened beverage includes any non-alcoholic beverage, syrup, or other concentrate used to make a beverage that lists any caloric sugar-based sweetener as ingredients. This includes but is not limited to:
- high fructose corn syrup
The term does not include:
- any beverage where natural milk is the primary ingredient (listed first)
- any beverage for medical use (electrolyte drinks)
- any meal replacement liquids
- alcoholic beverages
- infant/baby formula
- 100 percent natural fruit or vegetable juice with no added sweetener
- any beverage that contains fewer than 40 calories per 12-ounce serving
How the tax is applied
Seattle’s sweetened beverage tax applies to sweetened beverages distributed in Seattle. The distributor pays the sweetened beverage tax to the city.
The tax rate is $.0175 per fluid ounce.
Note: There is a reduced tax rate of $.01 per fluid ounce for certified manufacturers.
- Certain exemptions may apply.