In August of 2017, the price of bottled water across the state of Washington went up.
The news didn’t make much of a splash, garnering one-off coverage in local news outlets as the tax took effect. Overnight, stores simply charged sales tax for a product once off limits, much like food and other items deemed necessary.
The reaction in no way matched the relentless deluge of press and outrage earned by the Seattle City Council’s decision to impose a significantly higher tax on sugary beverages that took effect on Jan. 1, 2018.
The sugary beverages tax was met with criticism for its regressive nature, particularly the fact that the council chose to tax drinks more likely to be consumed by people of color and low-income people, exempting sweetened coffee beverages. That large half-caf iced coffee with four pumps of vanilla syrup available at a coffee joint near you won’t be taxed, but the 12-ounce bottle of Dr. Pepper will.
The sugary drinks tax mobilized the business community, which began posting signs to direct customers’ ire toward the true culprit behind the $2.52 increase in their grocery bill.
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But the sales tax on bottled water? It was more subtle and far more likely to fall on people who need it to do basic things like hydrate or wash their hands — people experiencing homelessness. And in the face of rising temperatures and outbreaks of disease in other areas associated with a dearth of hygiene, that added cost could have serious consequences.
Real Change vendor Jen Tibbits is no longer homeless, but she is a lady who knows how to stretch a dollar. The 2017 vendor of the year has weekly appointments that will keep her out for hours at a time, so she usually buys a bottle of water during the evening. One week, she noticed something.
“I asked why she was charging me more, and she said it was because of the new tax,” Tibbits said.
Water taxes everywhere
As it happens, the story of the bottled water tax is anything but straightforward and is oddly intertwined with a charge on something else entirely — a now-defunct statewide sugary drinks tax.
The tale begins in 2004, when the Washington Legislature exempted bottled water from the normal sales tax as part of a multistate agreement to standardize sales tax in response to a Supreme Court decision. The 31 states that agreed would not tax bottled water.
In a state that refuses to tax billionaires, lawmakers could only cut themselves off from that revenue source for so long, however. In 2010, the simplifying agreement was amended, allowing them to charge sales tax on bottled water again.
It didn’t last long. In November 2010, a committee called Stop the Food and Beverage Tax Hikes put in more than $16 million to an initiative to overturn sales taxes on several consumable items: candy, bottled water, as well as a statewide tax on carbonated drinks like sodas.
For a short time, there was a statewide tax on both bottled water and carbonated beverages. Weirdly, it excluded carbonated water. The latter equated to 2 cents per 12-ounce bottle of soda, a relatively small amount compared to the 1.75 cents per fluid ounce imposed by the Seattle City Council.
The ballot initiative successfully reversed that in what was the most expensive campaign in Washington history at the time, according to Ballotpedia. The repeal conflicted with another measure meant to fund energy efficiency projects, which also continued the tax on bottled water through 2013.
As of the 2017–19 budget cycle, however, Washington was hard up for cash. The Legislature had many expensive things to pay for, and limited room to maneuver. Gov. Jay Inslee saw that, and in his budget proposal included the idea of reinstituting the tax on bottled water.
The haul? $57 million.
The Legislature — incapable of agreeing on much except for exempting itself from public records laws and funding the government through taxation by a thousand regressive cuts — acceded to the suggestion and, as of Aug. 1, 2017, the sales tax on bottled water was renewed.
The Legislature — incapable of agreeing on much except for exempting itself from public records laws and funding the government through taxation by a thousand regressive cuts — acceded to the suggestion and, as of Aug. 1, 2017, the sales tax on bottled water was renewed.
But the tax stood out in other ways. It doesn’t just fall on bottled water as one might imagine it — the Dasani’s and Fuji’s of the world. Bottled water is also defined as water transported in containers that are not sold with the product. Basically, that means that if a person goes to a store and refills their own reusable container, they could still get taxed on the water.
Secret solutions
The legislature offered some relief to people who rely on purchasing water at stores. People can receive a refund on the taxes if they live in an area that does not have potable water or if a doctor prescribes water for a medical condition.
But it’s not so simple.
A professional must first test the water in the area and designate it undrinkable. People seeking the exemption can then submit that documentation alongside proof that they paid the tax sometime in the past four years. Alternatively, a person could provide their prescription for water, which one would think would be easy to get given that no one can survive more than a few days without water, making thirst a universally terminal condition.
Of course, that would require that doctors know about their newfound duty to prescribe tap water.
Asked about the measure, Neighborcare, a nonprofit medical provider whose clients include homeless and low-income people, had not heard about a prescription for water. Neither did the spokesperson for the Washington State Medical Association, an organization that represents physicians.
That’s not surprising, given that the Department of Revenue, the state agency responsible for taxation, said that outreach had been concentrated on retailers and areas without potable water, according to a spokesperson.
That doesn’t give people like Tibbits, or folks in encampments who rely on bottled water for basic hygiene and survival, much help.
Taxes on bottled water and other single-use containers are not unique to Washington state. Many states apply some kind of tax, generally to discourage the production of waste or encourage recycling. That’s a positive in the eyes of Peter Gleick, co-founder of the Pacific Institute and opponent of bottled water.
Plastic bottles constitute an ecological crisis, creating literal mountains of waste and consuming millions of barrels of fossil fuels in their production, all for a product less safe and many times more expensive than the water that comes out of the tap, Gleick said.
Still, the Washington tax on bottled water seemed misguided.
“We impose taxes as a society for two reasons. One is to change people’s behavior by raising the cost of something so people will use less of whatever it is — gasoline, cigarettes or bottled water. The other is to raise money,” Gleick said.
Ideally, taxes should be used to mitigate the harm done by the product, but the additional sales tax garnered from bottled water has no such direct use.
Ideally, taxes should be used to mitigate the harm done by the product, but the additional sales tax garnered from bottled water has no such direct use.
“My preference would be, my preference for any of these use taxes, the money raised by the tax be earmarked for programs to address the problems associated with bottled water, or to help improve access to safe water to people who can’t afford it, including the homeless community,” Gleick said. “Let’s earmark some of that $57 million for water fountains.”
We’ll see how that goes.
Ashley Archibald is a Staff Reporter covering local government, policy and equity. Have a story idea? She can be can reached at ashleya (at) realchangenews (dot) org. Twitter @AshleyA_RC
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