Bill Text: NY A06857 | 2021-2022 | General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Imposes an excise tax on sugary drinks; establishes a community health equity fund to utilize the revenues generated by such tax.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2022-01-07 - print number 6857b [A06857 Detail]
Download: New_York-2021-A06857-Introduced.html
Bill Title: Imposes an excise tax on sugary drinks; establishes a community health equity fund to utilize the revenues generated by such tax.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2022-01-07 - print number 6857b [A06857 Detail]
Download: New_York-2021-A06857-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 6857 2021-2022 Regular Sessions IN ASSEMBLY April 12, 2021 ___________ Introduced by M. of A. REYES -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law and the state finance law, in relation to imposing an excise tax on sugary drinks The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The tax law is amended by adding a new article 17 to read 2 as follows: 3 ARTICLE 17 4 EXCISE TAX ON SUGARY DRINKS 5 Section 400. Definitions. 6 401. Imposition of excise tax. 7 402. Report of sales and remittance of tax. 8 403. Deposit and disposition of revenue 9 404. Records of distributors. 10 405. Exemptions. 11 406. Rules and regulations. 12 407. Severability. 13 § 400. Definitions. As used in this article, the following terms shall 14 have the following meanings: 15 1. "Beverage for medical use" means a beverage suitable for human 16 consumption and manufactured for use as an oral nutritional therapy for 17 persons who cannot absorb or metabolize dietary nutrients from food or 18 beverages, or for use as an oral rehydration electrolyte solution for 19 infants and children formulated to prevent or treat dehydration due to 20 illness. "Beverage for medical use" shall also mean a "medical food" as 21 defined in section 5(b)(3) of the Orphan Drug Act (21 U.S.C. 22 360ee(b)(3)). "Beverage for medical use" shall not include drinks 23 commonly referred to as "sports drinks" or any other common names that 24 are derivations thereof. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD05927-03-1A. 6857 2 1 2. "Bottle" means any closed or sealed container regardless of size or 2 shape, including, without limitation, those made of glass, metal, paper, 3 plastic or any other material or combination of materials. 4 3. "Bottled sugary drink" means any sugary drink contained in a bottle 5 that is ready for consumption without further processing such as, with- 6 out limitation, dilution or carbonation. 7 4. "Consumer" means a person who purchases a sugary drink for consump- 8 tion and not for sale to another. 9 5. "Distributor" means any person, including manufacturers and whole- 10 sale dealers, who receives, stores, manufactures, bottles and/or 11 distributes bottled sugary drinks, syrups or powders, for sale to 12 retailers doing business in the state, whether or not that person also 13 sells such products to consumers. 14 6. "Milk" means natural liquid milk regardless of animal or plant 15 source or butterfat content; natural milk concentrate, whether or not 16 reconstituted; or dehydrated natural milk, whether or not reconstituted. 17 7. "Natural fruit juice" means the original liquid resulting from the 18 pressing of fruits, or the liquid resulting from the dilution with water 19 of dehydrated natural fruit juice. 20 8. "Natural vegetable juice" means the original liquid resulting from 21 the pressing of vegetables, or the liquid resulting from the dilution 22 with water of dehydrated natural vegetable juice. 23 9. "Non-nutritive sweetener" means any non-nutritive substance suit- 24 able for human consumption that humans perceive as sweet and includes, 25 but is not limited to, aspartame, acesulfame-K, neotame, saccharin, 26 sucralose and stevia. "Non-nutritive sweetener" excludes sugars. For 27 purposes of this definition, "non-nutritive sweetener" means a substance 28 that contains fewer than five calories per serving. 29 10. "Person" means any natural person, partnership, cooperative asso- 30 ciation, limited liability company, corporation, personal represen- 31 tative, receiver, trustee, assignee or any other legal entity. 32 11. "Place of business" means any place where sugary drinks, syrups or 33 powders are manufactured or received for sale in the state. 34 12. "Powder" means any solid mixture of ingredients used in making, 35 mixing, or compounding sugary drinks by mixing the powder with any one 36 or more other ingredients, including without limitation water, ice, 37 syrup, simple syrup, fruits, vegetables, fruit juice, vegetable juice, 38 carbonation or other gas. 39 13. "Retailer" means any person who sells or otherwise dispenses in 40 the state a sugary drink to a consumer whether or not that person is 41 also a distributor as defined in this section. 42 14. "Sale" means the transfer of title or possession for valuable 43 consideration regardless of the manner by which the transfer is 44 completed. 45 15. "Sugars" means any monosaccharide or disaccharide nutritive sweet- 46 ener such as glucose, fructose, lactose, and sucrose. Examples include, 47 but are not limited to, cane sugar, beet sugar, high-fructose corn 48 syrup, honey, fruit juice concentrate, and other caloric sweeteners. For 49 purposes of this definition, "nutritive" means a substance that contains 50 five or more calories per serving. 51 16. "Sugary drink" means any nonalcoholic beverage, carbonated or 52 noncarbonated, which is intended for human consumption and contains any 53 added sugars. As used in this definition, "nonalcoholic beverage" means 54 any beverage that contains less than one-half of one percent alcohol per 55 volume.A. 6857 3 1 17. "Syrup" means a liquid mixture of ingredients used in making, 2 mixing, or compounding sugary drinks using one or more other ingredients 3 including, without limitation, water, ice, a powder, simple syrup, 4 fruits, vegetables, fruit juice, vegetable juice, carbonation or other 5 gas. 6 18. "Water" means no-calorie liquid water, which is either non-fla- 7 vored or flavored without the use of sugars. "Water" may be carbonated 8 (including but not limited to club soda and seltzer), still, distilled 9 and/or purified. 10 § 401. Imposition of excise tax. 1. There are hereby levied and 11 imposed on a distributor excise taxes at the following rates: 12 (a) Beverages: 13 (i) Beverages with seven and a half grams of sugars or less per twelve 14 fluid ounces shall not be taxed. 15 (ii) Beverages with more than seven and a half grams but less than 16 thirty grams of sugars per twelve fluid ounces shall be taxed at a rate 17 of one cent per ounce. 18 (iii) Beverages with thirty grams of sugars or more per twelve fluid 19 ounces shall be taxed at a rate of two cents per ounce. 20 (b) Syrups and powders sold or offered for sale to a retailer for sale 21 in the state to a consumer, either as syrup or powder or as a sugary 22 drink derived from such syrup or powder: 23 (i) If the beverages made from the syrup or powder have seven and a 24 half grams of sugars or less per twelve fluid ounces, such syrup or 25 powder shall not be taxed. 26 (ii) If the beverages made from the syrup or powder have more than 27 seven and a half grams but less than thirty grams of sugars per twelve 28 fluid ounces, such syrup or powder shall be taxed at a rate equal to one 29 cent per ounce of sugary drink produced from that syrup or powder. 30 (iii) If the beverages made from the syrup or powder have thirty grams 31 of sugars or more per twelve fluid ounces, such syrup or powder shall be 32 taxed at a rate equal to two cents per ounce of sugary drink produced 33 from that syrup or powder. 34 (c) For purposes of calculating the tax imposed pursuant to paragraph 35 (b) of this subdivision, the volume of sugary drink produced from syrups 36 or powders shall be the larger of (i) the largest volume resulting from 37 use of the syrups or powders according to the manufacturer's 38 instructions, or (ii) the volume actually produced by the retailer, as 39 reasonably determined by the commissioner. 40 2. The nutrition facts product label, as required by the food and drug 41 administration, shall be used to determine the amount of sugars per 42 twelve ounces of sugary drink by referencing the "serving size" and 43 "sugars" or "total sugars" lines on the label. 44 3. The tax rates set forth in this section shall be adjusted annually 45 by the commissioner in proportion with the Consumer Price Index: All 46 Urban Consumers for All Items for the Northeast Region Statistical Area 47 as reported by the United States bureau of labor statistics or any 48 successor to that index. 49 4. Manufacturers, bottlers, wholesalers or distributors shall add the 50 amount of the tax imposed by this section to the retail price of sugary 51 drinks. 52 5. A retailer who sells bottled sugary drinks, syrups or powders in 53 the state to a consumer, on which the tax imposed by this section has 54 not been paid by a distributor, is liable for the tax imposed in subdi- 55 vision one of this section at the point of sale to a consumer.A. 6857 4 1 6. The taxes imposed by this section are in addition to any other 2 taxes that may apply to persons or products subject to this chapter. 3 § 402. Report of sales and remittance of tax. Any distributor or 4 retailer liable for the tax imposed by this article shall, on or before 5 the last day of March, June, October, and December of each year, file 6 with the department a return, on forms to be prescribed by the commis- 7 sioner and furnished by the department, stating the quantity of sugary 8 drinks, syrups and powders subject to the excise tax imposed by this 9 article sold or offered for sale in the three months immediately preced- 10 ing the month in which the report is due, and any other information 11 required by the commissioner, along with the tax due. 12 § 403. Deposit and disposition of revenue. All taxes collected or 13 received by the department under this article shall be deposited in the 14 children's health promotion fund established pursuant to the provisions 15 of section ninety-nine-ll of the state finance law. 16 § 404. Records of distributors. Every distributor, and every retailer 17 subject to this chapter, shall maintain for not less than two years 18 accurate records, showing all transactions that gave rise, or may have 19 given rise, to tax liability under this chapter. Such records are 20 subject to inspection by the commissioner at all reasonable times during 21 normal business hours. 22 § 405. Exemptions. The following shall be exempt from the tax imposed 23 by this chapter: 24 1. Bottled sugary drinks, syrups, and powders sold to the United 25 States government or an Indian nation or tribe. 26 2. Bottled sugary drinks, syrups, and powders sold by a distributor to 27 another distributor if the sales invoice clearly indicates that the sale 28 is exempt. If the sale is to a person who is both a distributor and a 29 retailer, the sale shall also be tax exempt and the tax shall be paid 30 when the purchasing distributor or retailer resells the product to a 31 retailer or a consumer. This exemption does not apply to any other sale 32 to a retailer. 33 3. Beverages sweetened solely with non-nutritive sweeteners. 34 4. Beverages consisting of one hundred percent natural fruit or vege- 35 table juice with no added sugars. 36 5. Beverages in which milk, or soy, rice or similar milk substitute, 37 is the primary ingredient or the first listed ingredient on the label of 38 the beverage. 39 6. Coffee or tea without added sugars. 40 7. Infant formula. 41 8. Beverages for medical use. 42 9. Water without added sugars. 43 § 406. Rules and regulations. The commissioner shall promulgate any 44 rules and regulations necessary to carry out the provisions of this 45 article. 46 § 407. Severability. If any clause, sentence, paragraph, section or 47 part of this article shall be adjudged by any court of competent juris- 48 diction to be invalid, such judgment shall not affect, impair, or inval- 49 idate the remainder thereof, but shall be confined in its operation to 50 the clause, sentence, paragraph, section, or part thereof directly 51 involved in the controversy in which such judgment shall have been 52 rendered. 53 § 2. The state finance law is amended by adding a new section 99-ll to 54 read as follows: 55 § 99-ll. Children's health promotion fund. 1. There is hereby estab- 56 lished in the joint custody of the comptroller and the commissioner ofA. 6857 5 1 taxation and finance a fund to be known as the "children's health 2 promotion fund". The children's health promotion fund shall consist of 3 all taxes, interest, penalties, and other amounts collected pursuant to 4 article seventeen of the tax law. 5 2. All moneys in the children's health promotion fund shall, upon 6 appropriation by the legislature, be allocated for the purposes of 7 statewide childhood obesity prevention activities and programs as 8 follows: 9 (a) Twenty percent to the department of health to coordinate statewide 10 childhood obesity prevention activities and to fund state-level child- 11 hood obesity prevention and children's dental programs. This funding 12 shall support programs that use educational, environmental, policy, and 13 other public health approaches that achieve the following goals: improve 14 access to and consumption of healthy, safe, and affordable foods and 15 beverages; reduce access to and consumption of calorie-dense, nutrient- 16 poor foods; encourage physical activity; decrease sedentary behavior; 17 and raise awareness about the importance of nutrition and physical 18 activity to childhood obesity prevention. 19 (b) Thirty-five percent for community-based childhood obesity 20 prevention programs. This funding shall support programs that use educa- 21 tional, environmental, policy, and other public health approaches that 22 achieve the following goals: improve access to and consumption of heal- 23 thy, safe, and affordable foods and beverages; reduce access to and 24 consumption of calorie-dense, nutrient-poor foods; encourage physical 25 activity; decrease sedentary behavior; and raise awareness about the 26 importance of nutrition and physical activity to childhood obesity 27 prevention. The commissioner of health shall be responsible for the 28 distribution of these funds to community-based organizations and to 29 local health departments, with priority given to counties that have the 30 highest rates of childhood obesity. 31 (c) Ten percent to evidence-based prevention, early recognition, moni- 32 toring, and weight management intervention activities in the medical 33 setting. The commissioner of health shall be responsible for identifying 34 activities and allocating these funds. 35 (d) Thirty-five percent to elementary and secondary schools for educa- 36 tional, environmental, policy and other public health approaches that 37 promote nutrition and physical activity. The approaches funded pursuant 38 to this paragraph can include improving or building school recreational 39 facilities that are used for recess and physical education; providing 40 continuing education training for physical education teachers; hiring 41 qualified physical education teachers; improving the quality and nutri- 42 tion of school breakfasts, lunches, and snacks; ensuring free, clean 43 drinking water access throughout the school day; and incorporating prac- 44 tical nutrition education into the curriculum. The commissioner of 45 education is responsible for the allocation and distribution of these 46 funds. 47 3. Monies shall be payable from the fund on the audit and warrant of 48 the comptroller on vouchers approved and certified by the commissioner 49 of health. 50 § 3. This act shall take effect on the first of January next succeed- 51 ing the date on which it shall have become a law. Effective immediately, 52 the addition, amendment and/or repeal of any rule or regulation neces- 53 sary for the implementation of this act on its effective date are 54 authorized to be made and completed on or before such effective date.
