The House of Representatives’ inclusion of the proposed Sugar Sweetened Beverage Tax in the 2023 Budget Bill is causing a stir amongst businesses in the CNMI.
In fact, Saipan Chamber of Commerce executive director Kimberly Camacho told the media yesterday that the largest business group in the CNMI sent a letter to Gov. Ralph DLG Torres with a request to oppose the bill.
“The Saipan Chamber of Commerce has joined a coalition formed by many local and regional companies that manufacture, distribute, and sell non-alcoholic beverages across the CNMI to engage with the Small Business Community to support the opposition of the Sugar Sweetened Beverage Tax bill proposed in House Bill 22-116 YR 23 Appropriations Act,” said Camacho.
Camacho said that the coalition has put together a letter to submit to Torres, requesting the opposition to the Sugar Tax Bill in H.B. 22-116. She listed several points that would be addressed in the letter. Firstly, showing how the bill will include a huge, regressive tax on local consumers, showing that with a regressive beverage tax, low-income families will be dramatically impacted.
Giving examples of how the tax rate of 2-cents-per-ounce will increase the cost of 12-pack beverages to an additional $2.88, and how two-liter bottles will eventually rise in cost another $1.35; the coalition seeks to imply that through adding a tax on common grocery items, such as beverages, would mean that local consumers may see price increase up to, and possibly beyond 50% at grocery stores, restaurants, vending machines, and movie theaters. The letter will also pointedly highlight that local consumers already pay a 1/2-cent-per-ounce tax on many of these beverages, which already generates close to a million dollars per year in tax revenue.
Another point the coalition seeks to highlight in the letter is their belief that a beverage tax will be an enormous burden on local businesses, and especially small business owners who may rely on such sales.
“Restaurants, convenience stores, movie theaters, grocery stores, and other small store owners are still struggling to recover from the economic impact of COVID and record inflation. Now is not the time to add more burden to local businesses.” It states
The letter also noted that the wide public opposes discriminatory taxes on beverages, highlighting the fact that there are only seven cities across the nation with a beverage tax. An example of an unsuccessful beverage tax implementation was one in Cook County, Illinois, where the beverage tax implemented had to be repealed within months of implementation, due to the outcry from local consumers and businesses.
Camacho said “Generally speaking, should this bill pass, businesses will suffer with the extreme tax increase and consumers will suffer by raising prices on their favorite beverages.”
Camacho stated that a petition signing will follow the submission of the request letter. Dates of the petition’s release are not yet confirmed with updates to follow.