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Tax,
Government

Jun. 2, 2025

Santa Cruz's new sugar-sweetened beverage tax heads to court

Business groups say the measure violates the state's Affordable Groceries Act, which prevents local agencies from collecting additional taxes or fees on groceries.

A coalition of business groups have challenged a new voter-approved soda tax in Santa Cruz, claiming it violates a 2018 state law.

"During the November 2024 election, the City of Santa Cruz ('City') knowingly defied the Affordable Groceries Act and adopted a tax on sodas and other sugar-sweetened beverages within the City ('Beverage Tax')," wrote John T. Ryan, a partner with Latham & Watkins LLP who represents the plaintiffs. "In deciding whethe...

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