A proposed 18 percent sales tax on soft drinks and beverages has been eliminated from Gov. Paterson’s 2009-10 Executive Budget.
It is part of an agreement announced Wednesday by Paterson, Senate Majority Leader Malcolm Smith and Assembly Speaker to eliminate $1.3 billion in tax increases.
Under the provision, the new tax would have applied to fruit drinks that contain less than 70 percent natural fruit juice and non-diet soft drinks and beverages.
Earlier it was estimated the tax on sugary sodas and juice drinks would have reduced obesity while raising some $400 million a year for health programs.
The Albany agreement was reached after it was confirmed that federal funds would be available through aid from the American Reinvestment and Recovery Act (ARRA) that could provide New Yorkers with $6.5 billion in fiscal relief through the end of 2010. That includes $5 billion in flexible funding throughu increased Medicaid reimbursements, $1.2 billion to restore education reductions and $274 million in other flexible funding.
“Soft drinks are a small part of our business but that tax would certainly have impacted it,” said Charlie LoTempio, co-owner of Twin-Lo Beverage Mart Inc., Porter Road in the Town of Niagara.
LoTempio noted that independent retailers have generally lost the edge to the superstores on such goods. One of those giant stores offered specials that included three 12-packs of soft drinks for about $10.
“In the end it’s the consumer who is most affected,” LoTempio added, “It’s the person pushing that cart full of soft drinks who would feel the impact of an 18 percent tax.”
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