The main peer-reviewed study of the Navajo Nation unhealthy food tax is a 2020 analysis in the CDC’s Preventing Chronic Disease, which found that the 2% tax on foods of minimal-to-no nutritional value generated $7.58 million in gross revenue from 2015 through 2019, and that inflation-adjusted revenue from those foods fell roughly 4.1% per year, consistent with residents gradually buying less junk food.1Centers for Disease Control and Prevention. The Navajo Nation Healthy Diné Nation Act: A Two Percent Tax on Foods of Minimal-to-No Nutritious Value, 2015-2019 Two companion studies look at consumer perceptions and at how the revenue funded community wellness projects.
What the Tax Covers
The Healthy Diné Nation Act of 2014 took effect in April 2015 and was the first tribal junk food tax in the United States. It adds 2% to foods the law classifies as having minimal-to-no nutritional value: sweetened beverages such as sodas, energy drinks, and sweetened teas; prepackaged snacks high in salt, saturated fat, or sugar; and sweets like candy and pastries. At the same time, the law removed the Navajo Nation’s standard 5% sales tax from fresh fruits, fresh vegetables, nuts, nut butters, seeds, and filtered bottled water.2Navajo Nation Office of the Navajo Tax Commission. Navajo Nation Sales Tax as Amended by CJN-48-20 That pairing is what the studies evaluate: a 2% price penalty on unhealthy items alongside a 5% price break on fresh ones, applied at every retailer on Navajo land.
Originally passed as a pilot, the tax was reauthorized indefinitely by the Navajo Nation Council in December 2020 after the first wave of evaluation data came in.3Community Outreach and Patient Empowerment Program. Navajo Nation Healthy Diné Nation Act: An Implementation Study
Revenue and Purchasing Findings
The CDC study is the central quantitative source. Across 2015 through 2019, the 2% tax collected $7.58 million in gross revenue, implying roughly $379 million in taxed junk food purchases over the period, or about $90 million per year.1Centers for Disease Control and Prevention. The Navajo Nation Healthy Diné Nation Act: A Two Percent Tax on Foods of Minimal-to-No Nutritious Value, 2015-2019
The trend is the finding that matters. Revenue in 2016, the first full year, was $1,887,323. It then dropped 3.2% in 2017, 1.2% in 2018, and 4.6% in 2019. Adjusted for food-cost inflation, the overall decline was 12.4%, or roughly 4.1% per year. A linear regression across the full period showed a statistically significant downward trend. Because the tax rate never changed, falling revenue means residents were spending less on taxable junk food year over year.1Centers for Disease Control and Prevention. The Navajo Nation Healthy Diné Nation Act: A Two Percent Tax on Foods of Minimal-to-No Nutritious Value, 2015-2019
Did the Healthy-Food Exemption Hurt Overall Tax Revenue?
One concern with cutting the 5% sales tax on produce was whether general sales tax collections would fall. The study found they did not. Total retail-related sales tax revenue was $10.32 million in 2015 and $10.85 million in 2018, which worked out to about $10.24 million after adjusting for inflation. The difference was not statistically significant. Shoppers appear to have bought more fresh food, but overall retail spending held roughly steady, so the exemption did not open a hole in the Navajo Nation’s general budget.1Centers for Disease Control and Prevention. The Navajo Nation Healthy Diné Nation Act: A Two Percent Tax on Foods of Minimal-to-No Nutritious Value, 2015-2019
What Residents Said About the Tax
A separate study published in Preventive Medicine Reports surveyed Navajo Nation members about their awareness of the tax and whether it influenced their choices. Most participants knew the tax existed, and many described it as a good idea. Several said it made them think about their health when deciding what to buy, functioning as a small but consistent nudge at the register. Some reported that it helped them reconsider unhealthy purchases even though the price increase itself was modest.4ScienceDirect. Impact of the Healthy Diné Nation Act of 2014 on Unhealthy Food Purchasing Behaviors and Perceptions of the Tax Among Navajo Nation Members
Support was not universal. Some participants expressed frustration with the tax’s effect on tight grocery budgets. On a reservation where many families live below the federal poverty line and the nearest full-service grocery store can be hours away, a 2% increase on the limited options stocked at a local convenience store can feel burdensome. The authors note this tension mirrors criticism of soda taxes in cities such as Philadelphia and Berkeley.
Where the Revenue Went
A third Preventing Chronic Disease paper describes how the money was spent.5PubMed Central. The Navajo Nation Healthy Diné Nation Act: A Description of Community Wellness Projects Funded by a 2% Tax on Minimal-to-No-Nutritious-Value Foods All collections flow into a dedicated Community Wellness Development Projects Fund managed by the Navajo Division of Community Development and distributed to the Nation’s 110 chapters. Half of the pool is split equally among all chapters; the other half is distributed based on each chapter’s number of registered voters.6Navajo Nation Council. Resources and Development Committee Approves the Healthy Diné Community Wellness Development Project Distribution Policy
Through 2019, the fund disbursed $6,062,335, meaning 99.1% of collected revenue reached chapters, averaging about $13,000 per chapter per year.1Centers for Disease Control and Prevention. The Navajo Nation Healthy Diné Nation Act: A Two Percent Tax on Foods of Minimal-to-No Nutritious Value, 2015-2019 Chapters have used the money for community gardens and farmers markets, walking trails and outdoor fitness equipment, nutrition and traditional food classes, and playgrounds, basketball courts, and skate parks. Each chapter must submit a resolution for its projects, follow Navajo Nation budget procedures, and comply with annual reporting and audit requirements.5PubMed Central. The Navajo Nation Healthy Diné Nation Act: A Description of Community Wellness Projects Funded by a 2% Tax on Minimal-to-No-Nutritious-Value Foods That accountability record is part of what the Council pointed to when it made the tax permanent.
Finding and Citing the Study
Readers looking for the research should start with the CDC paper, titled “The Navajo Nation Healthy Diné Nation Act: A Two Percent Tax on Foods of Minimal-to-No Nutritious Value, 2015–2019,” published in Preventing Chronic Disease and available free on the CDC website. The consumer-perception study appears in Preventive Medicine Reports and is available through ScienceDirect. The implementation and funded-projects study is in Preventing Chronic Disease and indexed on PubMed Central.
Some references online cite a Health Affairs DOI (10.1377/hlthaff.2020.00000) for this research. That appears to be an erroneous or placeholder citation. The primary quantitative study on the tax’s fiscal and purchasing effects is the CDC Preventing Chronic Disease paper linked above, and that is the publication to use when citing the work.