The Senate voted to ban local governments from adding taxes to food, chewing gum or beverages
By NACS Online
This week, the Michigan senate approved a bill supported by AFPD that would forbid state localities from enacting taxes on chewing gum, drinks and food, the Detroit News reports. The preemptive proposal is aimed at restricting local ability to tax soft drinks.
The state’s constitution already exempts groceries from the state sales tax, but state Sen. Pete MacGregor’s bill would ensure that local governments couldn’t slip taxes on food and drinks via a loophole in the exemption. “We can’t have a patchwork of certain cities and certain counties tax certain items and others don’t,” he said. “This will kill these cities’ economy.”
Not everyone agreed that this could be a potential problem for the state. “There’s not a single municipality in our state that is actively doing this,” state Sen. Rebekah Warren said. “What this policy will do is take one more tool out of the tool box of our local units of government.”
“While local governments and advocates of these taxes want everyone to believe that they are acting in the interest of public health and safety, the real motivation is to raise revenue to fund more local government growth and bureaucracy and to bail out local budget deficits from years of over-spending,” Charlie Owens, state director of the National Federal of Independent Businesses, testified during a committee hearing recently.
Seattle, Philadelphia, San Francisco and other cities have enacted local taxes on sugar-sweetened beverages. For more on the economic impact and consequences of beverage taxes on retailers and consumers, read “A Costly Pour” in the October issue of NACS Magazine.