Philly ‘Soda Tax’ Upheld by Top Court

By: - July 19, 2018 12:00 am

A worker stocks soda products at a supermarket in Philadelphia. The Pennsylvania Supreme Court has upheld a sugary drink tax of a penny-and-a-half per ounce. Matt Rourke/The Associated Press

The Pennsylvania Supreme Court upheld Philadelphia’s 1.5-cent-per-ounce tax on soda and other sugary drinks, rejecting arguments from retailers and the beverage industry that the city tax illegally duplicated state sales taxes.

The state Supreme Court noted in its ruling that while sales taxes levied by the state are imposed at the retail level, the beverage tax is assessed on distributors and wholesalers.

“The payer of the beverage tax is the distributor, or in certain circumstances, dealers, but never the purchasing consumer,” Chief Justice Thomas Saylor wrote for the majority.

Philadelphia’s beverage tax raised nearly million in 2017, most of which is expected to be spent on education, parks, playgrounds and libraries. As Stateline has reported, Philadelphia is one of several cities that have adopted new taxes on sugary beverages.

Seattle’s soda tax revenue is exceeding projections, as city officials said the new tax, at 1.75 cents an ounce, has brought in more than million in the first quarter of 2018. But the tax in Cook County, Illinois, home to Chicago, also 1.5 cents an ounce, was repealed by the county board months after its imposition under a barrage of criticism from retailers and consumers.

Proponents say soda taxes cut down on consumption of sugary drinks. But opponents say the taxes force consumers to go to other jurisdictions to buy their soda and other beverages.

Philadelphia Mayor Jim Kenney, a Democrat, said in a statement that the ruling will be good for education and recreation and “offers renewed hope for tens of thousands of Philadelphia children and families who struggle for better lives in the face of rampant poverty.”

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Elaine S. Povich
Elaine S. Povich

Elaine S. Povich covers consumer affairs for Stateline. Povich has reported for Newsday, the Chicago Tribune and United Press International.