Bill Text: MS SB2830 | 2013 | Regular Session | Introduced
Bill Title: The Sweetened Beverages and Syrups Tax Law; enact.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2013-02-27 - Died In Committee [SB2830 Detail]
Download: Mississippi-2013-SB2830-Introduced.html
MISSISSIPPI LEGISLATURE
2013 Regular Session
To: Finance
By: Senator(s) Dawkins
Senate Bill 2830
AN ACT TO CREATE THE SWEETENED BEVERAGES AND SYRUPS TAX LAW; TO PROVIDE THAT DISTRIBUTORS WHO RECEIVE, STORE, MANUFACTURE, BOTTLE OR DISTRIBUTE CERTAIN SWEETENED BEVERAGE PRODUCTS FOR SALE TO RETAILERS IN THIS STATE MUST OBTAIN FROM THE DEPARTMENT OF REVENUE A PERMIT TO ENGAGE IN SUCH BUSINESS; TO IMPOSE AN EXCISE TAX ON EVERY DISTRIBUTOR FOR THE PRIVILEGE OF SELLING CERTAIN SWEETENED BEVERAGE PRODUCTS; TO CREATE THE CHILDREN'S HEALTH PROMOTION FUND; TO PROVIDE THAT 20% OF THE REVENUE FROM THE EXCISE TAX IMPOSED BY THIS ACT SHALL BE DEPOSITED TO THE CREDIT OF THE CHILDREN'S HEALTH PROMOTION FUND AND THAT THE REMAINDER OF SUCH REVENUE SHALL BE DEPOSITED INTO THE STATE GENERAL FUND; TO PROVIDE FOR THE ALLOCATION OF THE MONEY IN SUCH FUND; TO PROVIDE CERTAIN EXEMPTIONS FROM THE TAX LEVIED BY THIS ACT; TO PROVIDE PENALTIES FOR VIOLATIONS OF THIS ACT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) The Legislature finds that over the past thirty (30) years, the obesity rate in the United States has substantially increased. The prevalence of adult obesity has more than doubled during that time, and for children the increase has been even more dramatic, with the obesity rate among children ages six (6) to eleven (11) quadrupling over the last four (4) decades. According to statistics compiled by the Centers for Disease Control and Prevention, in 2008 the State of Mississippi had the highest rate of obesity in the United States, with thirty-three and four-tenths percent (33.4%) of our state's adult residents considered obese (body mass index (BMI) of thirty (30) and above) and even higher rates forty-one and three-tenths percent (41.3%) among African-American residents.
(2) The Legislature further finds that the prevalence of obesity among children in our state is also one of the nation's highest with seventeen and nine-tenths percent (17.9%) of Mississippi school-age children being obese in 2007 based on body mass index-for-age standards versus the national average of thirteen percent (13%).
(3) The Legislature further finds that obese children are at least twice as likely as nonobese children to become obese adults. Research indicates that the likelihood of an obese child becoming an obese adult increases with age and adolescents who are obese have a greater likelihood of being obese in adulthood, as compared to other children.
(4) The Legislature further finds that the obesity epidemic has led to a dramatic increase in obesity-related health conditions, such as type 2 diabetes, asthma, and heart disease. These health conditions costs each of the states billions of dollars in health care costs and lost productivity. Overweight and obesity account for One Hundred Forty-seven Billion Dollars ($147,000,000,000.00) in health care costs nationally, or nine percent (9%) of all medical spending per year. Obesity-related annual medical expenditures in the State of Mississippi are estimated at Seven Hundred Fifty-seven Million Dollars ($757,000,000.00) in 2003 dollars, which translates into Nine Hundred Eighty-two Million Dollars ($982,000,000.00) in 2009 dollars. Almost sixty percent (60%) of these costs are paid by public funds through Medicare and Medicaid (Two Hundred Twenty-three Million Dollars ($223,000,000.00) and Two Hundred Twenty-one Million Dollars ($221,000,000.00) respectively in 2003 dollars).
(4) The Legislature further finds that numerous studies strongly support a link between obesity and consumption of sweetened beverages such as soft drinks, energy drinks, sweet teas and sports drinks. A study of a five-year period between 1999 and 2004 showed that children and adolescents consumed ten percent (10%) to fifteen percent (15%) of their daily caloric intake from sweetened beverages, which offer little or no nutritional value and massive quantities of added sugars. For example, a twelve-ounce can of soda contains the equivalent of approximately ten (10) teaspoons of sugar and the U.S. Department of Agriculture recommends that a person eating a two thousand two hundred (2,200) calorie diet should eat no more than twelve (12) teaspoons of refined sugar in a day.
(4) The Legislature further finds that Mississippi is suffering a budget shortfall of unprecedented proportions, threatening core state functions including transportation, economic development, education, and other vital services.
SECTION 2. This act may be cited as the Sweetened Beverages and Syrups Tax Law.
SECTION 3. It is the intent of the Legislature, by adopting the Sweetened Beverages and Syrups Tax Law and creating the Children's Health Promotion Fund, to diminish the human and economic costs of obesity in the State of Mississippi. This act is intended to discourage excessive consumption of sweetened beverages by increasing the price of these products and by creating a dedicated revenue source for programs designed to prevent and treat childhood obesity and health conditions which result from it.
SECTION 4. For purposes of this act:
(a) "Bottle" means any closed or sealed container regardless of size or shape, including, without limitation, those made of glass, metal, paper or plastic or any other material or combination of materials.
(b) "Bottled sweetened beverage" means any sweetened beverage contained in a bottle that is ready for consumption without further processing such as, without limitation, dilution or carbonation.
(c) "Caloric sweetener" means any caloric substance suitable for human consumption that humans perceive as sweet and includes, without limitation, sucrose, fructose, glucose, other sugars and fruit juice concentrates. The term "caloric sweetener" shall not include noncaloric sweeteners. For purposes of this definition, "caloric" means a substance which adds calories to the diet of a person who consumes that substance.
(d) "Commissioner" means the Commissioner of Revenue of the Department of Revenue, and his authorized agents and employees.
(e) "Consumer" means a person who purchases a sweetened beverage for consumption and not for sale to another.
(f) "Distributor" means any person, including manufacturers and wholesale dealers, who receives, stores, manufactures, bottles or distributes bottled sweetened beverages, syrup, or powder or base product for sale to retailers doing business in the State of Mississippi whether or not that person also sells such products to consumers.
(g) "Fund" means the Children's Health Promotion Fund established pursuant to Section 9 of this act.
(h) "Noncaloric sweetener" means any noncaloric substance suitable for human consumption that humans perceive as sweet and includes, without limitation, aspartame, saccharin and sucralose. The term "noncaloric sweetener" shall not include caloric sweeteners. For purposes of this definition, "noncaloric" means a substance which does not add calories to the diet of a person who consumes that substance.
(i) "Person" means any natural person, partnership, cooperative association, limited liability company, corporation, personal representative, receiver, trustee, assignee or any other legal entity.
(j) "Place of Business" means any place where sweetened beverages, syrups or powders or base products are manufactured or received for sale in the State of Mississippi.
(k) "Powder or base product" means a solid mixture of ingredients used in making, mixing or compounding sweetened beverages by mixing the powder or base product with any one or more other ingredients, including, without limitation, water, ice, syrup, simple syrup, fruits, vegetables, fruit juice, vegetable juice, carbonation or other gas.
(l) "Retailer" means any person who sells or otherwise dispenses in the State of Mississippi a sweetened beverage to a consumer whether or not that person is also a distributor as defined in this section.
(m) "Sale" means the transfer of title or possession for valuable consideration regardless of the manner by which the transfer is completed.
(n) "Sweetened beverage" means any nonalcoholic beverage, carbonated or noncarbonated, which is intended for human consumption and contains any added caloric sweetener; however, the term "sweetened beverage" does not include:
(i) Beverages sweetened with noncaloric sweeteners;
(ii) Beverages consisting of one hundred percent (100%) natural fruit or vegetable juice with no added caloric sweetener. For purposes of this paragraph, "natural fruit juice" and "natural vegetable juice" mean the original liquid resulting from the pressing of fruits or vegetables, or the liquid resulting from the dilution of dehydrated natural fruit juice or natural vegetable juice;
(iii) "Milk" without any added caloric sweetener, which means natural liquid milk regardless of animal source or butterfat content; natural milk concentrate, whether or not reconstituted, regardless of animal source or butterfat content; or dehydrated natural milk, whether or not reconstituted and regardless of animal source or butterfat content;
(iv) Coffee or tea without added caloric sweetener;
(v) Infant formula; and
(vi) Water to which neither carbonation nor any other substance has been added, except for minerals and noncaloric flavoring.
As used in this paragraph, "nonalcoholic beverage" means any beverage that contains less than one-half of one percent (1/2 of 1%) alcohol per volume.
As used in this paragraph, "natural fruit juice" and "natural vegetable juice" mean the original liquid resulting from the pressing of fruits or vegetables, or the liquid resulting from the dilution of dehydrated natural fruit juice or natural vegetable juice.
(o) "Syrup" means any liquid mixture of ingredients used in making, mixing or compounding sweetened beverages using one or more other ingredients including, without limitation, water, ice, a powder or base product, simple syrup, fruits, vegetables, fruit juice, vegetable juice carbonation or other gas.
SECTION 5. (1) Every distributor doing business in the State of Mississippi shall file with the commissioner an application for a permit to engage in such business, for each place of business owned and operated by the distributor before July 1, 2013, or a distributor's first acts which constitute doing business in the State of Mississippi. An application for a permit shall be filed on forms to be furnished by the commissioner for that purpose. An application must be subscribed and sworn to by a person with legal authority to bind the business. The application shall identify the owners of the applicant, the applicant's mailing address, the place of business to which the permit shall apply, and the nature of the business in which engaged, and any other information the commissioner may require for the enforcement of this act.
(2) Upon receipt of an application and any permit fee provided for in this act, the commissioner may issue to the applicant, for the place of business designated, a nonassignable permit, authorizing the sale of sweetened beverages, syrups, and powder or base product in the State of Mississippi. No distributor shall sell any sweetened beverage, syrup, or powder or base product without first obtaining a permit to do so under this act. Permits issued pursuant to this section shall expire on January 31 of each year and may be renewed annually.
(3) A permit cannot be transferred from one person to another, and a permit shall at all times be prominently displayed in a distributor's place of business. The commissioner may refuse to issue a permit to any person previously convicted of violations of this act under such procedures as the commissioner may establish by regulation.
SECTION 6. (1) There is hereby imposed an excise tax on every distributor for the privilege of selling the products governed by this act in the State of Mississippi, calculated as follows:
(a) The tax on syrup sold or offered for sale to a retailer for sale in the State of Mississippi to a consumer shall be Two Dollars and Fifty-six Cents ($2.56) for each gallon of sweetened beverage produced from that syrup, or Two Cents (2˘) per ounce. For purposes of calculating the tax, the volume of sweetened beverage produced from the syrup shall be the largest of:
(i) The largest volume resulting from use of the syrup according to any manufacturer's instructions;
(ii) The volume actually produced by the retailer; or
(iii) The volume typically produced by retailers doing business in the State of Mississippi as reasonably determined by the commissioner.
(b) The tax on bottled sweetened beverages shall be Two Dollars and Fifty-six Cents ($2.56) per gallon, or Two Cents (2˘) per ounce sold or offered for sale to a retailer for sale in the State of Mississippi to a consumer.
(c) The tax on powder or base product sold or offered for sale to a retailer for sale in the State of Mississippi to a consumer, either as powder or base product or as a sweetened beverage derived from that powder or base product, shall be Two Dollars and Fifty-six Cents ($2.56) for each gallon of sweetened beverage produced from that powder or base product, or Two Cents (2˘) per ounce. For purposes of calculating the tax, the volume of sweetened beverage produced from powder or base product shall be the largest of:
(i) The largest volume resulting from use of the powder or base product according to any manufacturer's instructions;
(ii) The volume actually produced by the retailer; or
(iii) The volume typically produced by retailers doing business in the State of Mississippi as reasonably determined by the commissioner.
(2) The tax amounts set forth in this section shall be adjusted annually by the commissioner by the rate of change in the Consumer Price Index for all Urban Consumers as reported by the United States Department of Labor, Bureau of Labor Statistics.
(3) A retailer who sells bottled sweetened beverages, syrup or powder or base product in the State of Mississippi to a consumer on which the tax imposed by this section has not been paid by a distributor shall be liable for the tax imposed in this section at the time of sale to a consumer.
(4) The taxes imposed by this section are in addition to any other taxes that may apply to persons or products subject to this act.
SECTION 7. (1) Any distributor or retailer liable for the tax imposed by this act shall, on or before the fifteenth day of every month, return to the commissioner under oath of a person with legal authority to bind the distributor or retailer, a statement containing its name and place of business, the quantity of sweetened beverages, syrup, and powder or base product subject to the excise tax imposed by this act sold or offered for sale in the preceding month and any other information required by the commissioner, along with the tax due.
(2) Twenty percent (20%) of the revenue collected from the excise tax imposed by this act shall be deposited into the Children's Health Promotion Fund and the remainder shall be deposited into the State General Fund.
SECTION 8. Every distributor and every retailer subject to this act shall maintain for not less than two (2) years accurate records showing all transactions that gave rise, or may have given rise, to tax liability under this act. These records shall be subject to inspection by the commissioner at all reasonable times during normal business hours.
SECTION 9. (1) There is hereby created a fund in the State Treasury to be known as the Children's Health Promotion Fund into which shall be deposited the money required to be deposited therein by Section 6 of this act and such other money from any source designated for deposit therein. All costs to implement this shall be paid from the Children's Health Promotion Fund. Unexpended amounts remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned on amounts in the fund shall be deposited to the credit of the fund.
(2) All money in the Children's Health Promotion Fund shall, upon appropriation by the Legislature, be allocated as follows:
(a) Twenty percent (20%) to the Department of Health to coordinate statewide childhood obesity prevention activities and to fund state-level childhood obesity prevention programs. This funding shall support programs that use educational, environmental, and policy approaches that achieve the following goals:
(i) Improve access to and consumption of healthy, safe, and affordable foods;
(ii) Reduce access to and consumption of calorie-dense, nutrient-poor foods;
(iii) Encourage physical activity; decrease sedentary behavior; and
(iv) Raise awareness about the importance of nutrition and physical activity to childhood obesity prevention.
(b) Thirty-five percent (35%) for community-based childhood obesity prevention programs. This funding shall support programs that use educational, environmental and policy approaches that achieve the following goals:
(i) Improve access to and consumption of healthy, safe and affordable foods;
(ii) Reduce access to and consumption of calorie-dense, nutrient-poor foods;
(iii) Encourage physical activity;
(iv) Decrease sedentary behavior; and
(v) Raise awareness about the importance of nutrition and physical activity to childhood obesity prevention.
The State Health Officer shall be responsible for the distribution of these funds to local health departments.
(c) Ten percent (10%) to evidence-based prevention, early recognition, monitoring, and weight management intervention activities in the medical setting. The State Health Officer shall be responsible for identifying activities and allocating these funds.
(d) Thirty-five percent (35%) to elementary and secondary schools for educational, environmental and policy approaches that promote nutrition and physical activity. These approaches should include:
(i) Improving or building school recreational facilities that are used for recess and physical education;
(ii) Providing continuing education training for physical education teachers;
(iii) Hiring qualified physical education teachers;
(iv) Implementing safe routes to schools programs;
(v) Improving the quality and nutrition of school breakfasts, lunches and snacks; and
(vi) Incorporating practical nutrition education into the curriculum.
The State Superintendent of Education is responsible for the allocation and distribution of these funds.
(3) All money in the Children's Health Promotion Fund shall be expended only for the purposes expressed in this act, and shall be used only to supplement existing levels of service and not to supplant current federal, state or local funding for existing levels of service.
(4) The State Health Officer and the State Superintendent of Education are hereby empowered to make such rules and regulations, and provide such procedural measures, as shall bring into effect the purposes of this section. The rules and regulations may provide for specific programs to be funded consistent with the allocation of funds set forth above.
SECTION 10. The following shall be exempt from the tax imposed by Section 6 of this act:
(a) Bottled sweetened beverages, syrups and powders or base products sold to the United States Government and American Indian Tribal Governments;
(b) Bottled sweetened beverages, syrups, and powders or base products sold by a distributor or a retailer for resale or consumption outside the State of Mississippi; and
(c) Bottled sweetened beverages, syrups and powders or base products sold by a distributor to another distributor that holds a permit issued pursuant to this act if the sales invoice clearly indicates that the sale is exempt. If the sale is to a person who is both a distributor and a retailer the sale shall also be tax exempt and the tax shall be paid when the purchaser distributor/retailer resells the product to a retailer or a consumer. This exemption does not apply to any other sale to a retailer.
SECTION 11. (1) Any person subject to the provisions of this act who fails to pay the entire amount of tax imposed by this act by the date that payment is due, fails to submit a report or maintain records required by this act, does business in the State of Mississippi without first obtaining a permit as required by this act, or violates any other provision of this act or rules and regulations promulgated by the commissioner for the enforcement of this act, shall be guilty of a misdemeanor and shall also be liable for the amount of the tax that may be due and a penalty equal to fifty percent (50%) of the tax due. The commissioner shall determine the amount due in the event of any payment or underpayment that may come to his attention and demand payment of all such taxes and penalties. Interest shall accrue on nonpayment or under payment of tax at a rate of twelve percent (12%) per year from the date the tax was due until paid. For good reason shown, the commissioner may waive all or any part of the penalties imposed but shall have no power to waive interest.
(2) All administrative provisions of the Mississippi Sales Tax Law, including those which fix damages, penalties and interest for nonpayment of taxes and for noncompliance with the provisions of said chapter, and all other requirements and duties imposed upon taxpayers, shall apply to all persons liable for taxes under the provisions of this act, and the commissioner shall exercise all the power and authority and perform all the duties with respect to taxpayers under this act as are provided in the Sales Tax Law, except where there is conflict, then the provisions of this act shall control.
SECTION 12. All taxes and penalties imposed under the provisions of this act remaining due and unpaid shall constitute a debt to the State of Mississippi, which may be collected from the person owing the taxes and penalties by suit or otherwise.
SECTION 13. At the end of each month, the State Auditor shall carefully check the books and records of the commissioner and shall verify the amounts paid into the Children's Health Promotion Fund.
SECTION 14. The commissioner is empowered to make such rules and regulations, and provide such procedural measures, in cooperation with the State Auditor, as he may reasonably think necessary to accomplish the purposes of this act.
SECTION 15. This act shall take effect and be in force from and after July 1, 2013.
