
The Soda Tax and Why Your Business Should Pay Attention
We wrote about “Sin Taxes and Sales Taxes” sin taxes, which are excise rather than sales taxes, but the soda tax is a special case. While sin taxes on cigarettes correlate with lowered rates of smoking, increased taxes on soda have largely gone unnoticed by the public. Does this mean that sales tax changes won’t affect your sales? People who regularly buy soda probably have an idea of how much a bottle costs.
Still, it’s not as closely watched as gasoline, where our awareness has a lot to do with huge signs that display the current price and the media’s attention on these prices. Manufacturers’ and retailers’ sales also affect the price of soda and keep it volatile enough that people may not notice the changes as much. We’re also used to variations in the price of soda based on where it’s bought, from ball games to restaurants to discount and drug stores.
Sales tax increases usually don’t make much change in people’s buying habits. The info graphic below shows what researchers think it would take to make a change in American soda buying habits. Does this mean that online sales taxes won’t affect consumers’ buying habits? Only time will tell.
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