Does the carbonated beverage tax apply to sales of syrup used to make fountain drinks?
The carbonated beverage tax is imposed on persons who sell carbonated beverages in this state, unless the beverages are exempt from the tax under the bottler’s exemption or were previously subject to the tax. Unlike the retail sales tax, the carbonated beverage tax is not a tax on the consumer. In other words, the carbonated beverage tax, similar to the business and occupation (B&O) tax, is one of the costs of doing business in this state. The Department takes no position on whether it is appropriate for taxpayers to make a line-item charge to consumers for the carbonated beverage tax. There is no explicit statutory prohibition against identifying the tax as a line-item charge to consumers. The Department recommends, however, that sellers who are contemplating a line item charge to consumers for the carbonated beverage tax consider the possible implications associated with the Nelson v. Appleway Chevrolet, Inc. and Johnson v. Camp Automotive, Inc. decisions and seek advice from their l
