Republican Senators said they considered the repeal to be illegal, because voters need to be consulted under Taxpayer’s Bill of Rights rules before new taxes can implemented, KRDO-TV reports. Democrats, meanwhile, argued that no new tax has been imposed – an exemption has been removed.
Proponents of removing the tax break say it could help boost the state’s economy by millions, but its opponents say that it could lead to job losses.
"We’re eliminating an exemption, we can't raise taxes without the vote of the people but we can implement tax policy which means we can decide whether or not to continue an exemption," Senator John Morse (D) was quoted as saying. "We’re in a huge budget hole, we’re facing choices of closing prisons, closing schools or closing loopholes.”
In its present form, the bill does not define exactly what will be taxed and what will not.
The House has already approved a similar bill, so it will now go back to the House for approval before heading to Governor Bill Ritter’s office to be signed into law.
The idea of a nationwide tax on soda was quietly shelved earlier this month, when a key congressional committee decided not to consider such a plan.
However, individual states are still going ahead with their own soda taxation proposals. New York Governor David Paterson, with the support of New York City mayor Michael Bloomberg, resurrected the idea of a penny-per-ounce tax on sugary drinks last month, as the city looks for ways to close a $7.4bn budget gap. And also last month, Mississippi state representative John Mayo introduced legislation to tax the syrup used to sweeten soda at a distribution level.