A COALITION of local and regional companies that manufacture, distribute and sell non-alcoholic beverages in the CNMI is opposed to the beverage tax proposed by the House of Representatives in its version of the fiscal year 2023 budget bill.
The Saipan Chamber of Commerce, a member of this coalition, is also reaching out to small businesses that will be affected by the beverage tax proposed in House Bill 22-116, which was unanimously passed by the House on Aug. 27. The bill is pending in the Senate.
Chamber Executive Director Kimberly C. Camacho said she hopes to receive statements from business owners on how this tax increase could affect their businesses.
The coalition has also drafted a letter to Gov. Ralph DLG Torres, citing their reasons for opposing the proposed beverage tax.
They said it is a huge regressive tax on local consumers, and an enormous burden on local businesses.
Moreover, they said it is unfair and discriminatory to single out beverages.
“A beverage tax is regressive and will dramatically impact low-income families,” they said. “At a tax rate of two cents per ounce, the cost of a 12-pack of beverages will increase by $2.88 and a two-liter bottle will cost an additional $1.35.”
“Adding a tax on common grocery items like beverages means that local consumers may see price increases of more than 50% or more at grocery stores, restaurants, vending machines and movie theaters,” they added.
“This beverage tax will impact small business owners who rely, in part, on beverage sales for their livelihood, and could cost jobs. Restaurants, convenience stores, movie theaters, grocery stores and other small store owners are still struggling to recover from the economic impact of Covid-19 and record inflation. Now is not the time to add more burden to local businesses.
“Local consumers already pay a 1/2-cent-per-ounce tax on many of these beverages, generating nearly a million per year in tax revenue.
“There are only seven cities across the country with a beverage tax. Cook County, Illinois — Chicago area — repealed their beverage tax within months of implementation due to the outcry from local consumers and businesses.”
The coalition is also distributing flyers urging the public to oppose the proposed beverage tax.
“Generally speaking, should this bill pass, businesses will suffer…and consumers will suffer,” Camacho said.
