2012 -- S 2798

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LC02229

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO TAXATION -- SALES AND USE TAXES--LIABILITY AND

COMPUTATION

     Introduced By: Senators Perry, Sosnowski, Nesselbush, Crowley, and Metts

     Date Introduced: March 21, 2012

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 44-18 of the General Laws entitled "Sales and Use Taxes -

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Liability and Computation" is hereby amended by adding thereto the following section:

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     44-18-18.2. Sugar-sweetened beverage tax. – (a) There is hereby levied and imposed, in

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addition to all other taxes and fees now imposed by law, a sugar-sweetened beverage tax upon

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every sugar-sweetened beverage, syrup, powder or other base product sold within the state of

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Rhode Island by a distributor, manufacturer, or wholesaler to a retailer or other purchaser,

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calculated as follows:

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     (1) The tax on sugar-sweetened beverages shall be one dollar and twenty-eight cents

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($1.28) per gallon of sugar-sweetened beverage.

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     (2) The tax on syrup, powder or other base product sold or offered for sale, either as

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syrup, powder or other base product or as a sugar-sweetened beverage derived from that syrup,

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powder or other base product, shall be equal to one dollar and twenty-eight cents ($1.28) per

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gallon of sugar-sweetened beverage produced from the syrup, powder or other base product. For

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the purposes of calculating the tax, the volume of sugar-sweetened beverage produced from the

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syrup, powder or other base product shall be the largest potential volume resulting from use of the

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syrup, powder or other base product according to the manufacturer’s instructions.

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     (b) The tax shall be paid to the tax administrator by the distributor, manufacturer, or

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wholesaler of the sugar-sweetened beverage, syrup, powder or other base product. All taxes paid

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pursuant to this section are conclusively presumed to be a direct tax on the retail consumer, pre-

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collected for the purpose of convenience and facility only.

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     (c) All sums received by the division of taxation under this section, after costs to

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implement this section have been deducted, shall be allocated as follows:

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     (1) To the Rhode Island department of health to coordinate evidence-based statewide

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childhood obesity prevention programs. This funding shall support programs that use educational,

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environmental, policy and other public health approaches that achieve the following goals:

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eliminate racial, ethnic and socio-economic disparities in childhood obesity rates; improve access

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to and consumption of healthy, safe and affordable foods, reduce access to and consumption of

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calorie-dense, nutrient-poor foods; encourage physical activity; decrease sedentary behavior; and

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raise awareness about the importance of nutrition and physical activity to childhood obesity

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prevention;

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     (2) To evidence-based community-based childhood obesity prevention programs. This

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funding shall support programs that use educational, environmental, policy and other public

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health approaches that achieve the following goals: eliminate racial, ethnic and socio-economic

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disparities in childhood obesity rates; improve access to and consumption of healthy, safe and

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affordable foods, reduce access to and consumption of calorie-dense, nutrient-poor foods;

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encourage physical activity; decrease sedentary behavior; and raise awareness about the

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importance of nutrition and physical activity to childhood obesity prevention. The director of the

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Rhode Island department of health shall be responsible for the distribution of these funds to

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community-based organizations, with priority given to low-income communities and

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communities of color that are most affected by the obesity epidemic

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     (3) To evidence-based prevention, early recognition, monitoring and weight-management

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intervention activities in the medical setting. The director of the Rhode Island department of

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health shall be responsible for identifying activities and allocating these funds; and

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     (4) To elementary and secondary schools for educational, environmental, policy and

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other public health approaches that promote nutrition and physical activity. The approaches

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funded pursuant to this subsection can include improving or building school recreational facilities

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to be used for recess and physical education; providing continuing education training for physical

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education teachers; hiring qualified physical education teachers; implementing safe routes to

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schools programs; improving the quality and nutrition of school breakfasts, lunches and snacks;

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ensuring free, clean drinking water access throughout the school day; counter-advertising; and

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incorporating practical nutrition education into the curriculum. The commissioner of the Rhode

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Island department of elementary and secondary education shall be responsible for the distribution

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of these funds.

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     (d) As used in this section, the following terms shall have the following meanings:

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     (1) “Distributor, manufacturer or wholesaler” means any person who receives, stores,

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manufacturers, bottles or sells sugar-sweetened beverages, syrup, powder or other base product to

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retail dealers, or to other distributors, manufacturers or wholesalers.

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     (2) “Milk” means natural liquid milk regardless of animal source or butterfat content

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natural milk concentrate, whether or not reconstituted, regardless of animal source or butterfat

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content; or dehydrated natural milk, whether or not reconstituted.

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     (3) “Natural fruit juice” means the original liquid resulting from the pressing of fruit, the

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liquid resulting from the reconstitution of fruit juice concentrate or the liquid resulting from the

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restoration of water to dehydrated fruit juice.

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     (4) “Natural vegetable juice” means the original liquid resulting from the pressing of

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vegetables, the liquid resulting from the reconstitution of vegetable juice concentrate or the liquid

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resulting from the restoration of water to dehydrated vegetable juice.

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     (5) “Nonalcoholic beverage” means any beverage that is not included in the definition of

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“Beverage” in subdivision 3-1-1(1).

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     (6) “Powder, syrup or other base product” means any solid or liquid mixture of base

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ingredients used in making, mixing or compounding sugar-sweetened beverages, by mixing the

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powder, syrup or other base product with water, ice, a powder, syrup, simple syrup, fruits,

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vegetables, fruit juice, vegetable juice, carbonation or other gas, or any other product suitable to

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make a sugar-sweetened beverage.

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     (7) “Retailer” means any person, except a distributor, manufacturer or wholesaler, who

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sells or otherwise dispenses sugar-sweetened beverages in the state of Rhode Island to the

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ultimate consumer.

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     (8) “Sale” means the transfer of title or possession for a valuable consideration of

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tangible personal property regardless of the manner by which the transfer is accomplished.

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     (9) “Sugar-sweetened beverage” means any nonalcoholic beverage, whether naturally or

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artificially flavored, whether carbonated or noncarbonated, sold for human consumption

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containing sugar, corn syrup or any other high-calorie sweetener, including, but not limited to,

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cola and other flavored drinks, and all other drinks and beverages commonly referred to as “soft

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drinks,” “sodas,” “sports drinks” or “energy drinks.”

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     (e) The following shall be exempt from the tax imposed by section 44-18-18.2:

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     (1) Beverages sweetened solely with non-caloric sweeteners;

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     (2) Coffee or tea, unless the coffee or tea is in a manufacturer’s sealed bottle or other

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container;

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     (3) Any frozen, freeze-dried or other concentrate to which only water is added to produce

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a nonalcoholic beverage that is one hundred percent (100%) natural fruit juice or natural

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vegetable juice;

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     (4) Any nonalcoholic beverage that is one hundred percent (100%) natural fruit juice or

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natural vegetable juice;

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     (5) Any product, whether sold in liquid or powder form, that is intended by its

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manufacturer for consumption by infants and that is commonly referred to as infant formula;

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     (6) Any product, whether sold in liquid or powder form, that is intended by its

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manufacturer for use as a dietary supplement or for weight reduction; and

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     (7) Any product containing milk or milk products.

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     SECTION 2. This act shall take effect upon passage.

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LC02229

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION -- SALES AND USE TAXES--LIABILITY AND

COMPUTATION

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     This act would impose a tax on distributors, manufacturers and wholesalers of sugar-

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sweetened beverages.

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     This act would take effect upon passage.

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LC02229

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