The Michigan Soft Drink Association is a trade organization that represents producers and distributors of carbonated soft drink beverages who have a manufacturing operation in Michigan. In fact, 99% of the soft drinks consumed in Michigan are made in Michigan. The soft drink industry in Michigan directly employs approximately 6,000 people and it is estimated an additional 25,000 retail employees depend on the sales of these beverages for their livelihood. The Association was formed in 1911, making them one of Michigan’s oldest business groups.
The Challenge
Throughout the country, local governments have instituted a tax on sweetened beverages and food. The tax also extends to beverages such as sport drinks, fruit drinks and even slightly flavored waters. Where this tax has been imposed, communities have faced numerous negative effects on consumers, employees, and businesses. So regressive and onerous, the tax has been repealed in several jurisdictions including Cook County, IL. Although no local governments in Michigan enacted this type of tax, the food, beverage, and retail industries believed it was critical to prevent local units of government from imposing such a tax in order to protect businesses, jobs and consumers in the state.
The Solution
MLC coordinated the establishment of a coalition of stakeholders and managed the behind the scene legislative action on the issue. Working with industry leadership, we identified key legislative supporters and allies across the state, and on both sides of the aisle. Through education of policymakers, we were able to reduce the stigma and negative connotations that may occur when the state preempts local units of government from creating a targeted tax. We accomplished this by showing the regressive nature and the negative impact on employment in other jurisdictions that have instituted this type of tax.
The Results
Through these combined efforts, House Bill 4999 was introduced on September 20, 2017, passed the House and Senate in a few weeks, and was signed by Governor Rick Snyder on October 26, 2017. Due to the efforts, the soft drink and food industries, retailers, and Michigan residents are now protected from local taxation.
