On June 28, 2018, California Governor Jerry Brown signed AB1838, which prohibits local government agencies from imposing new taxes on “groceries,” which are defined to exclude alcoholic beverages, cannabis products, cigarettes, tobacco products, and electronic cigarettes.  The bill is widely seen as a ban on taxes on sugary drinks in particular.

The passage of AB1838 is resulting in the withdrawal of Ballot Measure 17-0051, which was supported by the American Beverage Association and which would have required a super majority (rather than a simple majority) to raise local taxes and fees, regardless of the reason for the tax initiative.

The threat of Ballot Measure 17-0051 in terms of funding future social programs outweighed the prospective benefits of new taxes on sugary drinks.  Existing local taxes on sugary drinks in Berkeley, San Francisco, Albany, and Oakland are unaffected, as AB1838 affects only initiatives passed after January 1, 2018.