Twenty-two years ago California voters showed disdain for putting a tax on snack foods by overwhelming passing Proposition 163 to rescind what was called “snack taxes” imposed at the behest of the Wilson Administration in the early 1990s budget crisis. This came to mind when the city council of Berkeley voted just before the July 4th holiday to put on the ballot a tax on sugary soft drinks.

The proposed measure calls for an excise tax on the distributors of the sweetened drinks. In that way, proponents of the tax expect to avoid the constitutional prohibition of taxing ‘food products for human consumption’ set up by Proposition 163.

Proposition 163 added Section 34 to Article XIII of the state constitution denying the state and political subdivisions from levying a sales or use tax on the sale or storage of food products for human consumption.

You would think some sweetened drinks fall into that category. As to whether the tax is an excise tax or for the use of the product, proponents of the measure say the goal of the tax is to reduce consumption of the beverages by making the consumer pay more. The tax clearly is intended to fall ultimately on the end user. Another point: the tax is levied on distributors who by definition store the product.

Beyond the legal questions that we’ll leave to the lawyers are difficult administrative and deceptive issues related to the tax.

Berkeley officials want to impress voters that the tax is small – one cent per ounce of fluid. One ounce cans of soda do not exist. A standard can is 12-ounces. Say the can of soda costs a dollar. Essentially this proposed measure adds a new 12-percent tax on the product.

The campaign for the tax increase will emphasize a penny-an-ounce, not 12-cents per can and even more tax on larger containers.

Businesses dealing with the tax will have to deal with a slew of confusing exemptions: distributors that are not taxable by the city, distributions to retailers who have less than $100,000 in gross receipts, any distributor of a natural or common sweetener, milk, beverages for medical use, liquids sold for use in weight reductions a meal replacement, baby formula, and alcoholic beverages.

One of the reasons Proposition 163 passed eliminating the snack tax was because the tax was levied in such a confusing way – some snack products were taxed while similar products were not.

The Berkeley proposal adds more confusion and regulation on businesses in regulation rich California.