Maryland lawmakers debate imposing taxes on certain sugary drinks

CBS News

06-03-2025

Will Marylanders have to pay more for their favorite drinks like soda?
The House of Delegates Ways and Means Committee heard more than two hours of testimony from those for and against the new measure that would impose taxes on certain sugary drinks.
For Our Kids Act, or House Bill 1469, would tax distributors for selling sugary drinks, syrups and powders to retailers starting in July 2026.
Beverages would be taxed at 2 cents per ounce, and syrups and powders would be taxed at 2 cents per ounce of the beverage that can be produced, according to the instructions.
The rate of the Sugary Beverage Distributor tax would increase in 2027, and each following year based on the consumer price index. If there is a decline or no growth in the index, the tax rate would stay the same for that year.
Drinks sold to the government, sold for resale outside of the U.S., or sold to other distributors rather than retailers would be exempt from the tax.
Revenue for the state
Some of the revenue generated would support programs for students across the state.
The For Our Kids Act defines sugary drinks as non-alcoholic, carbonated, or non-carbonated beverages that contain added sugars or non-nutritive sweeteners, such as soda, some juices, and sports drinks. Natural fruit or vegetable juices, milk, infant formula and beverages for medical use would not be taxed under the bill.
"Excessive consumption of sweetened beverages, this is a really significant public health concern," said Del. Emily Shetty, the bill's sponsor.
Shetty explains that this bill is not only about public health but also about generating much-needed revenue for state programs.
"By imposing a tax on distributors, we can reduce the intake of these harmful drinks," Shetty said. "We can promote healthier choices and we can generate revenue."
Marylanders at an Annapolis gas station questioned if the money really would benefit the state's students. While they support the funds going to students, they aren't sure if the tax is needed, especially during an already challenging time.
"I really don't think they need to do that just think it's another way of taxing people, people are going to buy surgery, no matter what," said Annapolis resident Ken Walter.
Other states with similar taxes
Other municipalities, such as Philadelphia and Seattle, have a similar measure in place.
Philadelphia's tax is 1.5 cents per ounce, and for syrups and powders 1.5 cents per ounce of the final beverage product made.
Those for the bill argued that this is a steady revenue stream for these cities and that Maryland would be the first state to impose this, leading the way for others.
Against the sugary drink tax
Delegates on both sides of the aisle question Shetty and those testifying for the bill, asking them if this bill is truly effective and its projected impact on Marylanders.
Del. Jheanelle Wilkins, a Democrat from Montgomery County and Vice Chair of the committee was concerned that low-income communities would be hurt most by this bill.
"Very same community that we are working to help via the school lunch is, is also the same community that would probably bear the brunt of the cost and the tax," Wilkens said.
Del. Jason Buckel, a Republican from Allegany County, said while the bill targets the distributors to pay the tax, it would likely be passed on to Marylanders, who could simply take their business to neighboring states.
"I guarantee you your profit margin on the $3.49 bottle of soda is probably it's in the maybe the dimes," Buckel said. "That's just economics, they're going to have to pass the costs along."
"They need to find somewhere else to put that, but not on something that everybody likes. They do enough taxing," Edgewater resident William Brown said.
Impact on snowball stands
Others were concerned that snowball stands, a Maryland summer tradition, would be forced to close.
Del. Mike Griffith, a Republican who represents Cecil and Harford counties, said the syrup tax may eliminate this summer tradition.
"Well, snowball is syrup mixed with ice. So would this apply to our kids' Snowball stands?" Griffith questioned.
The syrup's distributor would be taxed.
Distributors and small businesses
People fighting against the bill also argue it will be bad for small businesses across the state, including grocery stores.
"This bill will take $500 million out of the grocery budgets of Marylanders. It will make it harder for grocery stores to continue to operate," said Marshall Klein, president of Klein's Family Markets.
It would also hurt the distributors, which includes a family-owned Pepsi bottling plant in Havre de Grace.
"If you pass this bill, we're looking at a 35% reduction in sales. That's going to translate to a 25% reduction of my workforce," Grant Connolly, owner of Pepsi-Cola Bottling Company of Havre de Grace.
Support programs for students
In the hearing on Thursday, Shetty explained the measure would generate $500 million per year.
At the end of each fiscal year, $189 million in revenue from the Sugary Beverage Distributor Tax would be allocated to the Healthy School Meals for All Fund and $50 million would go to the Child Care Scholarship Program.
The remaining revenue would go to the state's general fund.
The revenue sent to the Healthy School Meals fund would provide funding for the State Free Feeding Program and In-Classroom Breakfast program.
Both programs, created in a partnership between the Department of Education and county boards, would distribute funding to eligible non-public schools.
Health impacts of sugary drinks
The bill has gained support from the American Heart Association. In a statement, the organization said the bill would provide the revenue needed to address educational needs and food security while also curbing the health impacts of sugary drinks.
According to the American Heart Association, nearly two-thirds of youth consume at least one sugary drink per day, contributing to health risks like tooth decay, type 2 diabetes and heart disease.
"The For Our Kids Act represents a critical advancement in our mission to safeguard the health of children in Maryland," said cardiovascular nurse epidemiologist Yvonne Commodore-Mensah. "By taking strong action to curb the overconsumption of sugary drinks, while providing critical revenue to programs that benefit all families, we are making a powerful statement about prioritizing our children's well-being."
The organization said 40,000 deaths in the U.S. are linked to excessive consumption of sugary drinks.
Similar policies in the U.S. have led to more investments in public health and education, healthier choices for families and revenue that benefits children, the American Heart Association said.