Berkeley Municipal Code Ch. 7.72 Sugar-Sweetened Beverage Product Distribution Tax

A. In addition to any other taxes imposed by the City, the City hereby levies a tax of one cent ($0.01) per fluid ounce on the privilege of Distributing Sugar-sweetened beverage products in the City.

B. For the purposes of this Chapter, the volume, in ounces, of a Sugar-sweetened beverage product shall be calculated as follows:

1. For a Sugar-sweetened beverage, the volume, in fluid ounces, of Sugar-sweetened beverages distributed to any person in the course of business in the City.

2. For Added caloric sweeteners, the largest volume, in fluid ounces, of Sugar-sweetened beverages that could be produced from the Added caloric sweeteners. In accordance with rules and regulations promulgated by the City pursuant to Section 7.72.040, the largest volume, in fluid ounces, that would typically be produced from the Added caloric sweeteners shall be determined based on the manufacturer’s instructions or, if the Distributor uses the Added caloric sweeteners to produce a Sugar-sweetened beverage, the regular practice of the Distributor.

C. The tax shall be paid upon the first nonexempt Distribution of a Sugar-sweetened beverage product in the City. To the extent that there is a chain of Distribution within Berkeley involving more than one Distributor, the tax shall be levied on the first Distributor subject to the jurisdiction of the City. To the extent the tax is not paid as set forth above for any reason, it shall be payable on subsequent Distributions and by subsequent Distributors; provided, that the Distribution of Sugar-sweetened beverage products may not be taxed more than once in the chain of commerce. (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

The tax imposed by this Chapter shall not apply:

A. To any Distributor that is not subject to taxation by the City under the laws of the United States or the State of California;

B. To any Distribution of a Sugar-sweetened beverage product to a Retailer with less than $100,000 in annual gross receipts, as defined in Section 9.04.025, in the most recent year;

C. To any Distribution of Natural or common sweeteners; or

D. To any Distribution of Added caloric sweeteners to a Food Products Store as defined in Section 23F.04.010, if the Food Products Store then offers the Added caloric sweetener for sale for later use by customers of that store. (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

A. "Added caloric sweetener" means any substance or combination of substances that meets all of the following four criteria:

1. Is suitable for human consumption;

2. Adds calories to the diet if consumed;

3. Is perceived as sweet when consumed; and

4. Is used for making, mixing, or compounding Sugar-sweetened beverages by combining the substance or substances with one or more other ingredients including, without limitation, water, ice, powder, coffee, tea, fruit juice, vegetable juice, or carbonation or other gas.

An Added caloric sweetener may take any form, including but not limited to a liquid, syrup, and powder, whether or not frozen. "Added caloric sweetener" includes, without limitation, sucrose, fructose, glucose, other sugars, and high fructose corn syrup, but does not include a substance that exclusively contains natural, concentrated, or reconstituted fruit or vegetable juice or any combination thereof.

B. "Alcoholic beverage" means any beverage subject to tax under Part 14 (commencing with Section 32001) of the California Revenue and Taxation Code, as that Part may be amended from time to time.

C. "Beverage for medical use" means a beverage suitable for human consumption and manufactured for use as an oral nutritional therapy for persons who cannot absorb or metabolize dietary nutrients from food or beverages, or for use as an oral rehydration electrolyte solution for infants and children formulated to prevent or treat dehydration due to illness. "Beverage for medical use" shall also mean a "medical food" as defined in Section 109971 of the California Health and Safety Code, as that definition may be amended from time to time. "Beverage for medical use" shall not include drinks commonly referred to as "sports drinks" or any other common names that are derivations thereof.

D. "Business Entity" means any Person except for a natural person.

E. "City" means the City of Berkeley, California.

F. "City Manager" means the City Manager of the City of Berkeley or his or her designee.

G. "Consumer" means a natural person who purchases a Sugar-sweetened beverage product in the City for a purpose other than resale in the ordinary course of business.

H. "Distribution" or "Distribute" means the transfer of title or possession (1) from one Business entity to another for consideration or (2) within a single Business entity, such as by a wholesale or warehousing unit to a retail outlet or between two or more employees or contractors. "Distribution" or "Distribute" shall not mean the retail sale to a Consumer.

I. "Distributor" means any Person who Distributes Sugar-sweetened beverage products in the City.

J. "Milk" means natural liquid milk, regardless of animal source or butterfat content, natural milk concentrate, whether or not reconstituted, regardless of animal source or butterfat content, or dehydrated natural milk, whether or not reconstituted and regardless of animal source or butterfat content, and plant-based milk substitutes, that are marketed as milk, such as soy milk and almond milk.

K. "Natural or common sweetener" means granulated white sugar, brown sugar, honey, molasses, xylem sap of maple trees, or agave nectar.

L. "Person" means an individual, trust, firm, joint stock company, business concern, business trust, government, receiver, trustee, syndicate, social club, fraternal organization, estate, corporation, including, but not limited to, a limited liability company, and association or any other group or combination acting as a unit.

M. "Retailer" means any Person who serves Sugar-sweetened beverage products to a Consumer.

N. "Simple syrup" means a mixture of water and one or more Natural or common sweeteners without any additional ingredients.

O. "Sugar-sweetened beverage" means any beverage intended for human consumption to which one or more Added caloric sweeteners has been added and that contains at least 2 calories per fluid ounce.

1. "Sugar-sweetened beverage" includes, but is not limited to all drinks and beverages commonly referred to as "soda," "pop," "cola," "soft drinks," "sports drinks," "energy drinks," "sweetened ice teas," or any other common names that are derivations thereof.

2. "Sugar-sweetened beverage" shall not include any of the following:

(a) Any beverage in which milk is the primary ingredient, i.e., the ingredient constituting a greater volume of the product than any other;

(b) Any beverage for medical use;

(c) Any liquid sold for use for weight reduction as a meal replacement;

(d) Any product commonly referred to as "infant formula" or "baby formula"; or

(e) Any alcoholic beverage.

P. "Sugar-sweetened beverage product" means a Sugar-sweetened beverage or Added caloric sweetener. (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

A. It shall be the duty of the City Manager to collect and receive all taxes imposed by this Chapter, and to keep an accurate record thereof.

B. The City Manager is hereby charged with the enforcement of this Chapter, except as otherwise provided herein, and may prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this Chapter, including provisions for the reexamination and correction of returns and payments, and for reporting. Such rules and regulations may include, but are not limited to, the following:

1. The determination of the frequency with which a Distributor must calculate the tax. This determination shall not constitute an increase of the tax.

2. The determination of the frequency with which a Distributor must pay the tax. This determination shall not constitute an increase of the tax.

3. The determination of whether and how a Distributor must register with the City.

4. The determination of whether and how a Distributor who receives, in the City, Sugar-sweetened beverage products from another Distributor must report to the City the name of that Distributor.

5. The determination of whether and how a Distributor who receives, in the City, Sugar-sweetened beverage products from another distributor must report to the City the volume of Sugar-sweetened beverage products received from that Distributor.

6. The determination of what other documentation is required to be created or maintained by a Distributor.

C. The City Manager shall annually verify that the taxes owed under this Chapter have been properly applied, exempted, collected, and remitted. (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

A. The amount of any tax, penalty, and interest imposed under the provisions of this Chapter shall be deemed a debt to the City. Any Distributor owing money under the provisions of this Chapter shall be liable in an action brought in the name of the City for the recovery of such amount.

B. In order to aid in the City’s collection of taxes due under this Chapter, any Retailer that receives Sugar-sweetened beverage products from a Distributor shall, in accordance with rules and regulations promulgated by the City Manager pursuant to Section 7.72.040, either:

1. report to the City all such transactions, the volume in ounces of Sugar-sweetened beverage products received in each transaction, and the identity and contact information of the Distributor from whom the Sugar-sweetened beverage products were received; or

2. collect the tax that would be payable as a result of the transaction by the Distributor from whom the Sugar-sweetened beverage product was received and remit it to the City; or

3. provide to the City evidence that the Distributor from whom the Sugar-sweetened beverage products were received has registered as a Distributor with the City and that registration is current.

C. The City Council is authorized to have the taxes imposed by this Chapter collected by the County of Alameda or the California Board of Equalization in conjunction with the collection of other taxes for the City. If the City Council exercises this authorization, the duties and responsibilities of the City Manager shall be given, as appropriate, to the County of Alameda or the California Board of Equalization, which may delegate such duties and responsibilities as necessary and as authorized by law. (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

Whenever any tax under this Chapter has been paid more than once or has been erroneously or illegally collected or received by the City, it may be refunded only as provided in Chapter 7.20 of the Berkeley Municipal Code. (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

Except as otherwise provided by this Chapter or by rule or regulation promulgated by the City Manager, the tax imposed by this Chapter shall be administered in the same manner as taxes imposed pursuant to Chapter 9.04 and, without limitation, shall be subject to the same delinquency penalties, appeals processes and other enforcement provisions set forth in Chapter 9.04. (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

The tax imposed by this Chapter is a tax upon the privilege of conducting business, specifically, Distributing Sugar sweetened beverage products within the City of Berkeley. It is not a sales, use, or other excise tax on the sale, consumption or use of Sugar-sweetened beverage products. (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

A. There shall be established the Sugar-Sweetened Beverage Product Panel of Experts to make recommendations on how and to what extent the City should establish and/or fund programs to reduce the consumption of sugar-sweetened beverages in Berkeley and to address the effects of such consumption.

B. An officer or employee of the City designated by the City Manager shall serve as secretary of the Panel.

C. In accordance with Chapter 2.04, the Panel shall be composed of nine members appointed by the City Council.

D. Terms shall expire and vacancies shall be filled in accordance with the provisions of Section 2.04.030 through 2.04.145 of this Code.

E. Each member of the Panel must:

1. Have experience in community-based youth food and nutrition programs; or

2. Have experience in school-based food and nutrition programs and be referred by the Berkeley Unified School District; or

3. Have experience in early childhood nutrition education; or

4. Have experience in researching public health issues or evaluating public health programs related to diabetes, obesity, and sugary drink consumption; or

5. Be a licensed medical practitioner.

F. In accordance with Section 3.02.040, members of the Panel may be reappointed but shall not serve more than eight consecutive years.

G. The Panel shall, by majority vote, do each of the following:

1. Annually appoint one of its members as chair and one of its members as vice-chair;

2. Approve bylaws to facilitate the proper functioning of the Panel;

3. Establish a regular time and place of meeting. All meetings shall be noticed as required by law and shall be scheduled in a way to. allow for maximum input from the public. Minutes for each meeting shall be recorded, kept, and maintained; and

4. Publish an annual report that includes the following:

(a) recommendations on how to allocate the City’s general funds to reduce the consumption of sugar sweetened beverages in Berkeley and to address the results of such consumption;

(b) information, if available, concerning the impact of this Chapter on the public health of the residents of the City; and

(c) any additional information that the Panel deems appropriate.

H. Within 15 days of receipt of the publication of the Panel’s annual report, the City Manager shall cause the report to be published on the City’s Internet website and to be transmitted to the City Council and the Governing Board of the Berkeley Unified School District.

I. The City Council shall consider, but need not follow, the Panel’s recommendations and shall annually inform the Panel as to the extent to which it has implemented the Panel’s recommendations. (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

Pursuant to California Constitution article XIIIB, the appropriation limit for the City is increased by the aggregate sum authorized to be levied by this tax for each of the four fiscal years from 2025-26 through 2028-29. (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

The City Council, without a vote of the people, may, either permanently or temporarily, increase the dollar amount of the threshold for the small-business exemption in Section 7.72.020(B). (Ord. 7949-NS § 3, 2024; Ord. 7388-NS § 3 (part), 2014)

The ordinance codified in this chapter shall be effective until repealed or modified by the voters of the City of Berkeley. (Ord. 7949-NS § 3, 2024)