Proposed Bill Would Tax Water Bottlers 5 Cents Per Gallon

January 15, 2004

A new bill proposed by Rep. Mark Carter would charge a 5 cents per gallon tax on water pumped by commercial bottlers from New Hampshire's private wells and other sources.


Carter explained to the House Ways and Means Committee that the tax would not apply to existing withdrawals, only to withdrawals due to growth or to new businesses. Municipal withdrawals sold to commercial bottlers would be exempt from the tax.


Carter told Associated Press writer Norma Love the tax would discourage the growing number of businesses tapping into New Hampshire's water resources.


"This is a unique approach to managing water resources," he said, explaining that water bottlers likely will go to another state rather than pay a tax. "We're pumping enough of New Hampshire's water and shipping it off to points unknown."


"You don't want to see existing water bottling businesses in this state grow," said committee Chairman Norm Major, R-Plaistow.


If they want to grow, they would pay the 5 cent tax, Carter replied.


Major questioned whether the loss of jobs would be worth the increase in tax revenue. He pointed out that state water resources officials already control withdrawals to ensure there is enough water even during a drought.


Others asked Carter for examples of problems leading to his taxing idea. When he offered none, committee member Robert Giuda, R-Warren, said his bill "is a solution in search of a problem."


Rep. Peyton Hinckle, R-Merrimack, replied that international water companies are targeting places such as New Hampshire. "There's global competition going on for bottled water or water of any kind," he said, adding that taxing withdrawals could discourage the companies from taking New Hampshire's water and selling it elsewhere.


Rene Pelletier, who oversees the state's public drinking water program, said the agency already is protecting water resources enough. He said the state keep tabs on water withdrawals and can order businesses to pump less if problems arise.


He said lawmakers are in the middle of studying groundwater withdrawals. The study and any recommendations to the Legislature is due in November, so Carter's bill is premature.


Dave Juvet, a vice president of the Business and Industry Association of New Hampshire, questioned the constitutionality of taxing commercial water bottlers exclusively and not others that use water in their manufacturing processes.


Ralph Pears of Monadnock Mountain Spring Water Co. said the tax would be devastating to the business.


"At worst, a fee or tax on the water we utilize for bottling purposes would put us out of business, eliminating the jobs we provide and the taxes we pay to the state of New Hampshire," he stated in a memo to the committee.


James Demers, a lobbyist representing the International Bottled Water Association, said the tax would hurt the industry while providing little revenue to the state — $500,000 a year by one estimate.


Water bottlers account for about 1 percent of withdrawals.


"This approach is trying to kill an elephant with a fly swatter," Demers said.

Source:

The Associated Press

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