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Study: 97 percent of Seattle soda tax passed on to consumers

A sign indicating higher prices of sugary drinks due to Seattle's soda tax. (Dyer Oxley, MyNorthwest)

A new report estimates that nearly 100 percent of Seattle’s new tax on sweetened beverages has been passed on to consumers through higher in-store prices.

The Seattle Times reports that sodas have increased in price more than sugar-sweetened juices and bottled coffee drinks, and smaller stores have increased their prices more than supermarkets, according to the report by University of Washington researchers.

Some smaller stores have increased their prices even for beverages not subject to the tax, such as diet sodas.

Seattle’s tax of 1.75 cents per fluid ounce of sugary beverages took effect in January 2018. The tax charged to distributors of sugar-sweetened beverages. According to the study, distributors are passing that higher costs on to stores. The stores, in turn, up the price for customers who ultimately pay it. For example, the tax nearly doubled the price of soda at local Costcos.

Therefore, the near $17 million the City of Seattle collected in the first nine months of the soda tax was paid for, almost entirely, by Seattleites (city officials expected to raise $15 million over the entire year). Across all beverages and Seattle stores surveyed, an average 97 percent of the tax was passed on to consumers.

Information from The Seattle Times and MyNorthwest contributed to this report.

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