Is Soda Taxable in Maryland? Exemptions, SNAP, and Vending

Yes, soda is taxable in Maryland. The state applies its standard 6% sales and use tax to soft drinks and carbonated beverages, because Maryland law specifically excludes them from the “food” category that makes most groceries tax-free.¹ There is no separate soda excise tax on top of that, and no county or city adds its own rate. Grab a bag of chips at the grocery store and you pay nothing at the register. Grab a bottle of cola and you owe 6 cents on the dollar.²

What Counts as a Taxable Soft Drink

The Maryland Comptroller defines a soft drink as any nonalcoholic beverage containing natural or artificial sweeteners. A drink escapes that label, and becomes exempt food, if it contains milk, milk substitutes like soy or rice milk, or more than 10% real fruit or vegetable juice by volume.³

That 10% juice threshold is the line that decides a lot of borderline cases. A fruit punch with 15% real juice is exempt. A fruit-flavored soda with 5% juice is taxable. Carbonated water flavored with sweeteners is taxable too. Plain unflavored seltzer is not a soft drink by definition, but that alone doesn’t guarantee it is exempt.

Beverages That Surprise Shoppers

A few results run against intuition.

Energy and Sports Drinks Are Not Taxed

Monster, Red Bull, Gatorade, and Powerade are treated as “food” under Maryland law and are exempt from sales tax when sold at a grocery or market business.⁴ The distinction turns on labeling and ingredients: many of these drinks carry a Nutrition Facts label and contain enough non-sweetener content to avoid the soft drink classification. A sweetened iced tea with less than 10% juice, by contrast, is taxable.

Bottled Water Is Taxed

Bottled water is not classified as food under Maryland’s tax code and does pay the 6% tax.⁵ The Comptroller groups it with soft drinks, alcohol, and candy as items outside the food exemption. This makes Maryland an outlier compared with many states that exempt bottled water.

Beverages That Are Exempt

These qualify as “food” and are not taxed when sold by a grocery or market business for off-premises consumption:

Cow’s milk and milk substitutes such as soy, rice, and oat milk, including ice cream.¹
Juice with more than 10% real fruit or vegetable content.³
Sports and energy drinks like Gatorade and Powerade.⁴
Unsweetened, unflavored ground coffee and tea sold in a grocery setting. Prepared coffee drinks sold for immediate consumption are taxable as prepared food.

One catch: the exemption only applies when the seller runs a substantial grocery or market business and the food is for off-premises consumption. Buy the same juice at a restaurant or from a prepared-food vendor and the 6% tax applies.¹

Buying Soda With SNAP

Soda bought with SNAP (food stamp) benefits is not taxed. Federal law bars retailers from collecting any state or local tax on purchases made with SNAP benefits, even on items that would otherwise be taxable.⁶ Maryland’s statute mirrors that rule at § 11-206(b).¹ For split transactions, where you pay partly with SNAP and partly with cash or a card, the retailer charges sales tax only on the non-SNAP portion.

The USDA approved food restriction waivers in 2025 and 2026 that let certain states block SNAP purchases of soda altogether. Maryland is not currently among the states with an approved waiver, so soda remains a SNAP-eligible purchase here.⁷

Is There a Separate Soda Excise Tax

No. Maryland has no dedicated sugary-drink excise tax at the state level, and no Maryland county or city imposes one either. Maryland counties generally lack the legislative authority to levy this type of tax without state authorization, and none has been granted. Howard County explored reducing sugary drink consumption through non-tax measures such as pulling sodas from vending machines on county property, but a spokesperson for that effort acknowledged the county could not institute a soda tax on its own. Baltimore City has seen occasional advocacy for a local sugary-drink tax, but no ordinance has been enacted.

Lawmakers have tried at the state level. The most recent effort is House Bill 1469 from the 2025 session, the “For Our Kids Act,” which would impose a $0.02-per-ounce tax on distributors of sugary beverages, syrups, and powders.⁸ At that rate, a 12-ounce can would carry an extra 24 cents and a 2-liter bottle roughly 40 cents. The fiscal note indicates similar legislation had not been introduced in the prior three years.⁹ Because an excise tax hits distributors, the cost usually gets folded into the shelf price rather than appearing as a separate line at checkout. As of mid-2026, HB 1469 has not become law.

Vending Machine Sales Are Calculated Differently

Soft drinks bought from a vending machine still carry the 6% tax, but the math is slightly different. Vending operators multiply gross receipts by 94.5% before applying the 6% rate.² The reduction accounts for the fact that operators cannot easily separate taxable from nontaxable items at the machine level. On a $2.00 soda, the tax is calculated on $1.89 rather than the full $2.00. The per-can difference is small, but it changes the price a vending operator has to build into the button.

1
Maryland General Assembly. Maryland Code Tax-General 11-206 – Food
2
Maryland General Assembly. Maryland Code Tax-General 11-104
3
Comptroller of Maryland. Maryland Business Tax Tip 5 – Sales and Use Tax on Soft Drinks
4
Comptroller of Maryland. List of Tangible Personal Property and Services Subject to Sales and Use Tax
5
Comptroller of Maryland. Tax Guidance – Information About Sales of Food
6
Food and Nutrition Service. SNAP Retailer Notice – Sales Tax, Fees, and Refunds
7
Food and Nutrition Service. SNAP Food Restriction Waivers
8
Maryland General Assembly. Legislation – HB1469
9
Maryland General Assembly. Fiscal and Policy Note for House Bill 1469