The American Beverage Association, along with various grocers and businesses, has launched a lawsuit against Santa Cruz, asserting that the city's sugar-sweetened beverage tax violates state law and the California Constitution. They seek a court ruling to invalidate the tax and refund the money collected since its implementation. The tax, approved by a majority of voters, is positioned to raise approximately $1.3 million annually, aimed at benefiting public health, while opponents argue it disproportionately impacts small and Hispanic-owned businesses facing dire economic challenges.
"Santa Cruz illegally sidestepped the state legislature's popular and much-needed preemption of grocery taxes to impose new costs on working families and local Hispanic-owned businesses."
"The general tax of two cents per fluid ounce is paid by distributors of sugar-sweetened beverages and is estimated to generate about $1.3 million annually for the city's general fund."
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