Rep. Joe Farias (D-San Antonio) has proposed a bill (H.B. 779) that would impose a statewide penny-per-ounce tax on soft drinks, particular sweetened beverages and the powders and syrups used to make them. The tax would increase each year by the same percentage as the “most recent annual revised Consumer Price Index for All Urban Consumers.” The legislation, which purportedly aims to fight obesity and supplement funding for health programs in public elementary and secondary schools, calls for 80 percent of the tax revenue collected to go to the Texas Education Agency and 20 percent to the Department of State Health Services.

The proposed tax would apply to all non-alcoholic, carbonated and noncarbonated beverages and mixes that contain natural or artificial sweeteners. Exceptions to the tax would be certain sports drinks, 100-percent fruit and vegetable juices, infant formula, milk products, and beverages containing sweeteners that do not add calories. Water, coffee and tea without caloric additives would be exempt as well. Those who sell or import the beverages into the state for sale would be required to pay the tax each month and file a report with the state controller’s office detailing their sales and import figures. They would also be required to obtain an annual permit to sell the beverages. If enacted, the bill would impose a 50-percent penalty on those who fail to pay the tax or fail to file a report with the controller. Violations of the proposed bill would be considered a Class C misdemeanor.

This is apparently the second time Farias has tried to tax soft drink sales in Texas. He filed a similar bill in March 2011 that failed to pass. If enacted, the legislation would take effect September 1, 2013. See Courthouse News Service, January 31, 2013.