IBWA Opposes Proposed Hawaii Bottled Water Tax

Feb. 1, 2008
Association claims the tax is bad for the state’s consumers and businesses

The International Bottled Water Association (IBWA) has submitted written testimony in opposition to a proposed bill in Hawaii (HB 3445) that would impose a 5-cent-per-container “surcharge” on bottled water produced or distributed in-state. The testimony was provided to the Hawaii House Committee on Energy and Environmental Protection and the Hawaii House Committee on Water, Land, Ocean Resources and Hawaiian Affairs for consideration during a Jan. 31 public hearing on the bill.

IBWA’s testimony expressed opposition to the tax, stating that it that would significantly increase the cost of the product by requiring beverage distributors to pay a tax that will then be passed along to retailers, and ultimately to consumers. The tax would add $1.20 to every case of bottled water sold in the state, resulting in a cost increase of 30% on a $3.99 case.

Bottled water is regulated by the U.S. Food and Drug Administration (FDA)and the state of Hawaii. Food products in the state, including bottled water, are already taxed at least 4% under the state’s general excise tax. Hawaii State law also allows localities to apply a "tax on tax" beyond the 4% rate. The bottled water tax proposed in HB 3445 would further burden consumers already subjected to Hawaii’s broad-based general excise tax, IBWA claimed.

IBWA also claimed that the tax would penalize smart beverage choices by making it more difficult for consumers to drink bottled water, which is a healthy alternative to other beverages because it does not contain calories, caffeine, sugar, artificial flavors or colors, alcohol or other ingredients consumers may wish to avoid.

IBWA claimed that the tax would be discriminatory because it would require the bottled water industry to foot the entire bill for new state funds to pay for wetlands protection and programs to fight invasive species, efforts the industry supports but should not be held solely responsible for funding.

In reference to HB 3445’s preamble, the bottled water industry does not disparage municipal water supplies, IBWA stated. Since approximately 25% of bottled water initially comes from municipal water supplies before it is further purified and then bottled, the bottled water industry supports and is involved in maintenance of those municipal water supplies and their related infrastructures.

IBWA believes that groundwater management laws and regulations must be comprehensive, science-based, multi-jurisdictional, treat all users equitably and balance current uses with future needs. The association also believes that from the perspective of water management programs, the bottled water industry should be treated no differently than other beverage, food processing and other manufacturing operations, and that singling out bottled water from other FDA-regulated food products will not further the sustainability of water resources and is not in the best interest of consumers.

Source: IBWA