An excise tax on SSBs would have the dual purposes of reducing
consumption and raising revenue – where a fraction might be
earmarked for public health. In the United States, the first excise tax
was enacted on whiskey, just 2 years after the Constitution was
ratified.The tax was specifically proposed to diminish consumption.
The US Supreme Court has confirmed that taxation remains
Both the federal and state governments can impose excise taxes
on SSBs. Every state earmarks specific taxes, averaging 24 per cent of
total collections in 2005 – 4.4 per cent (Rhode Island) to 84 per cent
(Alabama).55 All 50 states and District of Columbia impose excise
taxes on tobacco products,and as of 2005, 26 states earmarked
them.
The ability of local governments to impose taxes is limited according
to the authority granted to them by the state constitution and
legislature. Some local jurisdictions can tax only specific products or
services;others need permission from the state government or its
constituency to impose a tax.Some have the authority to impose other revenue generating measures, such as fees or business privilege
taxes.Where permitted, SSBs may be taxed in this way.
Note that sales taxes vary among states, with some exempting
SSBs as a food, and others imposing a sales tax only in vending
machines.Because SSBs are not seen as necessities like other food,
states might consider abolishing their exemption from sales taxes.