International Bottled Water Association Opposes Anti-Tax Exemption Bill
ALEXANDRIA, Va. — The International Bottled Water Association (IBWA) urges Vermont Governor Peter Shumlin to continue his opposition to the sales taxes included in the budget proposals recently approved by both the Vermont Senate and House of Representatives. In particular, IBWA is opposed to the current provision in House Bill 528 that would eliminate the existing sales tax exemption for bottled water.
Bottled water is a packaged food product, and as such is currently exempt from sales and use taxes in Vermont. Therefore, bottled water should be treated no differently than other food products.
It is particularly troubling that as the legislature has been debating what products to tax in order to raise revenue, new or increased proposed taxes on candy, soft drinks, dietary supplements, cigarettes and meals have all been removed from the final version of the Senate’s budget package. Of all the items that Vermont lawmakers could impose a tax upon, they have opted to burden only the healthiest – bottled water.
Such an approach to levying taxes ignores the benefits of bottled water and creates an incentive to purchase items often associated with an unhealthy lifestyle. A tax on bottled water and not on these other items sends a message to Vermonters that bottled water is a poor choice but candy, soft drinks, dietary supplements and cigarettes are acceptable to purchase and use on a regular basis.
In addition, Vermont participates in the Streamlined Sales and Use Tax Agreement (SSUTA). If Vermont enacts a tax on bottled water, it will be the only state in the United States participating in SSUTA collecting a sales tax on bottled water but no other food products. Indeed, Vermont would have to adopt a confusing and convoluted SSUTA definition for bottled water in order to tax it without taxing other food products. In fact, beyond traditional bottled water, this tax, under the SSUTA bottled water definition, would appear to include all zero-calorie flavored water, sparkling water, seltzer water, fruit water, vitamin water, and perhaps even some zero-calorie “sodas” depending on how they are formulated. IBWA is concerned that legislators are not aware of the numerous water-based beverages which would now be subject to the state’s sales tax.
A tax on bottled water would be extremely regressive and affect those who can least afford it, such as the elderly and others on fixed incomes. Taxing bottled water would also establish an unfair and inconsistent source of revenue for government funding. Once a tax is applied, sales of these products will diminish and revenue estimates based on prior sales rarely take that into account. A tax on bottled water would inevitably impact sales that would hurt retailers on the borders of Vermont and small businesses that would struggle to compete with larger establishments.
About The International Bottled Water Association (IBWA)
The International Bottled Water Association (IBWA) is the authoritative source of information about all types of bottled waters. Founded in 1958, IBWA’s membership includes U.S. and international bottlers, distributors and suppliers. IBWA is committed to working with the U.S. Food and Drug Administration (FDA), which regulates bottled water as a packaged food product, and state governments to set stringent standards for safe, high quality bottled water products.
In addition to FDA and state regulations, the Association requires member bottlers to adhere to the IBWA Bottled Water Code of Practice, which mandates additional standards and practices that in some cases are more stringent than federal and state regulations. A key feature of the IBWA Bottled Water Code of Practice is an annual plant inspection by an independent, third party organization.