ANNAPOLIS, Md. – Maryland lawmakers are considering a new tax on sugary drinks that could raise nearly $500 million annually to fund free school meals, child care subsidies, and the state’s general fund. House Bill 1469, dubbed the “For Our Kids Act,” was introduced in the 2025 regular session with its first reading on Feb. 10, 2025, sponsored by Del. Emily Shetty, D-Montgomery County.
The bill imposes a 2-cents-per-ounce excise tax on distributors of sugary beverages, including sodas, sports drinks, energy drinks, and sweetened teas, as well as syrups and powders used to make them. Drinks with artificial sweeteners, like diet sodas, are also included, but natural juices with no added sugar are exempt. The tax would take effect July 1, 2025, with annual adjustments tied to inflation.
Revenue from the tax is projected at $450 million to $500 million yearly. Of that, $189 million would expand free breakfast and lunch programs for all public school students and qualifying private schools, while $50 million would boost state child care subsidies. The remainder—roughly $210 million—would flow to the general fund. The legislation mandates that these funds supplement, not replace, existing budget allocations.
Shetty, a member of the House Appropriations Committee, frames the bill as a dual-purpose measure. “We have significant funding shortfalls for high-priority programs, and we also have a public health crisis,” she said, citing rising health care costs tied to obesity and diabetes. The bill’s fiscal note aligns with her estimate, projecting $477 million in revenue for fiscal 2026, though it notes potential administrative costs of $296,000 to implement the tax.
Opposition has emerged from the beverage industry. The Maryland-Delaware-DC Beverage Association warned that the tax could raise prices by up to 60% on some drinks, piling onto the state’s 6% sales tax. “There could not be a worse time to burden working families and small businesses,” the group stated, calling for alternative budget solutions.
The bill has no Senate companion yet, but it’s backed by the American Heart Association, which points to similar taxes in cities like Philadelphia generating both revenue and health benefits. A hearing date is pending. If passed, Maryland would be the first state to enact a statewide sugary drink tax of this scope.
For more information, the full text of HB 1469 is available on the Maryland General Assembly website.