Soda sellers decry proposed fee
on September 13, 2012
For Doug Deaver, Richmond’s proposed cent-per-ounce soda tax would mean more paperwork and less profit. While city politicians argue over public health, government overreach and the influence of outside money, Deaver, who owns a vending machine company, worries more about his bottom line.
If Measure N passes in November, businesses that sell soda, energy drinks, or other beverages with added sweeteners like sugar or corn syrup would be required to keep tabs on exactly how many ounces of those drinks they sell. They would then pay the city one cent per ounce as part of their annual business license fees.
But small business owners say they don’t have a system to keep track of ounces-sold. In addition to driving away customers with higher prices, they say, the tax would mean a lot more bookkeeping.
“It’s called tax insanity,” Deaver said. “It’s insane to have even dreamed this up.” By the time he pays for gas, property taxes for his machines, and other overhead, he said he only makes $0.10-0.15 per soda. If the tax proposal passes, each of the 12-ounce sodas he sells would cost him $0.12 more. He would have to pass that cost on to the customer, which he predicts would affect sales. Then, he said, there’s the cost of the additional bookkeeping.
“We’re going to have to go through a tremendous amount of paperwork to implement this,” he said. “There’s nothing we have that tracks the amount of ounces.”
Deaver’s been in the vending machine business in the East Bay for 40 years, he said. Back in the 1980s his company was one of the biggest in the area. Now it’s just him, restocking one route in Richmond. But if the proposed tax passes, Deaver said he’s leaving, off to somewhere more hospitable. The city council should have thought about what the proposed tax would do to business owners like him, he said. “How many more boarded-up businesses do they want?”
It’s still unclear how city government would actually keep track of local soda sales. The tax would be included as part of the annual business tax most local companies pay, said Antonio Banuelos, revenue manager at the City Finance Department. “Pretty much it’s going to be self-reported,” he said. His department would be in charge of oversight on the tax, although he said that right now the department has no idea how much soda is sold annually in Richmond.
Banuelos said that he’s looking into different computer programs that would help business owners keep track of their soda sales. If the proposed tax passes, there’s a possibility that the city would provide some businesses with the program, he said.
Business owners across Richmond seemed to share Deaver’s sentiments.
Muhamad Nasser, tending the cash register at the Richmond Food Center grocery on the corner of 23rd Street and Cutting Blvd., said he’s not sure how much soda his family’s business sells each week. It would be difficult to track the figure in ounces, he said. The grocery sells at least a dozen different sizes of sugary drinks, many of them measured in fractions of ounces. “Redbulls, they got four different sizes themselves,” Nasser said.
He said he agrees that soda isn’t healthy, but that people will just go outside of Richmond to get their sugary drinks. Walgreens is less than two miles down the road, and is technically in El Cerrito, he said. “They ain’t gonna stop drinking soda,” Nasser said of his customers. “They’re just gonna stop buying it here.”
Codis Evans, sitting behind the counter at CJ’s Barbeque and Fish on McDonald Avenue, rocks in his seat and sings along with the R&B crooner on the radio. He actually got out of the soda business about a year ago, he said—he swapped his fountain for the Pepsi vending machine in the corner, restocked monthly by an outside vendor—but if the tax passes it could still bite into his business. He said that people sometimes come in for the soda and end up buying food. “It would affect our volume,” Evans said. “I’m not sure how much, but it would.”
Muhammad Saleh, owner of the 4th Street Market, in the Iron Triangle, said that he would pass the cost on to his customers, and that the last thing the city’s poor need is another tax. He said while the soda tax might make money for the city, it would probably end up costing the state and federal government. He sells around $1,000 of soda every week, he said, much of it to people living on government assistance. “The government’s going to end up paying the tax,” Saleh said.
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