Tax & Trade Blog
Newfoundland & Labrador Taxing Sugar-Sweetened Beverages!
While New York City’s (in)famous soda ban was ultimately struck down, in the years since other jurisdictions have moved forward with their own schemes to regulate sweetened beverages – now including Newfoundland & Labrador (“NL”).
On September 1, 2022, NL will introduce its so-called “Sugar Sweetened Beverage Tax” (“SSBT”). Interestingly, despite ostensibly being introduced to encourage “better beverage choices”, the tax does not depend on the amount of sugar in the drink – just the amount of drink itself!
What Does the SSBT Apply to?
The SSBT applies to three categories of goods (“subject goods”) to which sugar has been added – ready-to-drink beverages, dispensed beverages, and concentrated drink mixtures.
For the purposes of the SSBT “sugar” includes (but is not limited to) sugar, fructose, glucose, glucose-fructose, sucrose, honey, molasses, agave syrup, and corn syrup.
The SSBT does not apply to:
- 100% natural fruit and/or vegetable juices;
- syrups, purées and powders which the manufacturer intends to be primarily used for cooking or food preparation;
- beverages prepared in a food/beverage service establishment at the time of purchase (fountain drinks and other goods which list sugars as an ingredient do not fall within this exemption);
- alcoholic beverages;
- medical/therapeutic beverages (e.g., infant formula, meal replacement beverages);
- chocolate milk;
- fortified plant-based milk alternatives;
- yogurt beverages;
- ready-to-drink beverages in containers holding less than 75 mL; and
- subject goods brought into the province by a consumer, when less than certain prescribed quantities (5 L for ready-to-drink and dispensed beverages, 1 L for frozen concentrated juices or syrups, and 500 g for flavoured powders).
How Much is the SSBT?
The rate of tax is $0.20 per litre (pro-rated) for ready-to-drink and dispensed beverages. Concentrated drink mixtures are taxed at $0.20 per litre of the final beverage, if the manufacturer provides instructions on how to prepare the beverage, and are otherwise taxed at:
$0.80 per litre for frozen concentrated juices;
$2.00 per kilogram for flavoured powders; and
$1.20 per litre for syrups.
When Does the SSBT Apply?
The SSBT applies whenever a person acquires a subject good at retail in NL or brings subject goods into the province as a consumer. It does not apply to exports (although retailers have to claim a refund after paying tax). However, collection of the tax involves consumers, retailers and wholesalers!
Who Does the SSBT Apply to?
While consumers should ultimately bear the cost of the SSBT, it is collected and remitted by retailers and wholesalers.
Retailers do not need to break out the SSBT on their receipts, but do have to levy and collect the tax from consumers, and remit to registered wholesalers per the wholesaler’s invoice. Retailers who purchase from non-registered wholesalers (i.e., out-of-province suppliers) will also have to register, collect and remit the SSBT directly.
Wholesalers are required to register, collect tax at time of sale to retailers and consumers, and remit tax collected. They also have to issue invoices containing certain prescribed information, provide refunds of SSBT to retailers or consumers as required, complete and file returns on a monthly basis, and keep and maintain records.
For assistance with preparing for NL’s SSBT, please contact us!
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