ALBANY, N.Y. - In a bid to win votes and to placate the beverage industry, New York Gov. David Paterson has revised his soda tax proposal to exempt diet drinks and bottled water from the state sales tax and the soda tax, the New York Times reports.

The original tax would add a penny-per-ounce tax on soft drinks to bring in an estimated $1 billion annually. But with the Assembly and Senate not supportive of the tax, the governor is setting his sights lower by exempting diet drinks. The revised proposal would garner an estimated $815 million annually.

The governor??s office hopes that the combination of a sales tax and soda tax exemption for diet drinks will pacify the beverage industry, which would in turn bring on board previously reluctant lawmakers. Also, administration officials point out the new proposal??s positive impact on adult and childhood obesity and diabetes.

"They should embrace this idea," said a Paterson administration official. "They??re interested in selling product, and this proposal would increase the sale of more diet products. Product is product."

The beverage industry has cautioned that more details are needed before they sign on or off on the plan. "Critics make the presumption that people switch [from sugared sodas to diet drinks], but people have their preferences, which is why companies are constantly trying different innovations on products like Coke Zero and Pepsi Max," said Kevin Keane, a spokesman for the American Beverage Association.

The proposal would allow diet drinks and bottled water to receive a pass on the soda tax and on the state sales tax of 4 percent. However, the penny-per-ounce tax on sugary beverages would be levied on the drink bottler, which would likely then be paid by consumers in higher prices. The state would give localities their share of the lost sales taxes.

"We don??t have a problem with the state balancing its books, but why are you taking it out of the industry that provides thousands of jobs for your state?" said Nelson Eusebio, executive director of the National Supermarket Association. "The people affected most are urban minority dwellers. They have less money to spend on a product than someone who is more affluent. To fight obesity, let??s educate people. Taxation doesn??t equal good health."