Is water a beverage?

That question could come before a John Roberts court. And you never know, Bush’s impending pick may be the deciding vote.

A three-judge panel said Tuesday that bottled water is more like fruit juice, cider and other “naturally occurring substances” that are tax exempt, than it is Coke, Pepsi or even soda water.

The ruling affects 15 licensed water bottlers in Tennessee and six dairy processors with the capability to filter and package spring water. None is happier than English Mountain Spring Water Co. in Dandridge, about 30 miles east of Knoxville. The tiny bottler challenged the special 1.9% gross receipts tax when it was first imposed on bottled water producers in 2000.

The state was desperate that year to find new revenue to balance the budget. Bills to tax water bottlers failed in the legislature, but a state attorney general’s opinion offered an opportunity to tax under a 1937 post-Prohibition law regulating soft drinks.

“We happened to be the first guinea pig,” English Mountain founder John Burleson said yesterday, recalling the arrival of state auditors.

English Mountain, which produces about 150,000 gallons of water a week for vendors in 41 states, including every Cracker Barrel restaurant, faced $119,002 in taxes, penalties and interest from 2000 to 2003.

The company contended that bottled water is not a soft drink, but the state said bottled water was taxable because the soft drink law applied to “any and all nonalcoholic beverages.” Jefferson County Chancellor Telford Forgety Jr. ruled in favor of the state.

This further underscores the need for a staggering intellect for one who would be the next SCOTUS nominee.

Heh.