PHILADELPHIA – The Philadelphia City Council has approved a 1.5-cent-per-ounce tax on sugar-sweetened and diet beverages by a 13-4 vote, making the city of brotherly love the first major U.S. city to enact such a tax.

The city plans to start collecting the tax on January 1, 2017. According to the Pennsylvania Food Merchants Association:

• The tax is not on retailers, but is on distributors. Retailers are required to purchase from distributors specifically licensed to sell sugar-sweetened beverages.
• The definition of beverage includes any sweetened beverage, including those with sweeteners typically found in diet beverages.
• The tax rate is 1.5 cents per ounce for bottled beverages. The rate for syrup is 1.5 cents per ounce for the resulting beverage.
• Beverages containing milk are excluded, but only if they contain 50% or more of milk-based ingredients.
• Beverages containing 50% or more of fruits or vegetables are excluded.

The group also notes that the next step will likely be litigation challenging the authority of the city to levy this tax.

While some consumer groups hail Philadelphia’s decision as a “turning point” for the health advocates, others are not convinced.

“No one looks at Philadelphia as a bellwether,” Grover Norquist, president of Americans for Tax Reform, which came out strongly against the Philly soda tax earlier this month, told Politico.com. “It’s a declining city. … It’s a labor union-controlled city where the unions raise taxes on anyone they want to.”

According to the American Beverage Association, notes Politico, Mayor Jim Kenney justified the tax as a means to fund children's education. “It was very much inside baseball, local politics,” said ABA spokeswoman Lauren Kane, adding that in Philadelphia, the “stars aligned” in a way that’s unlikely to be repeated in other municipalities.

To read more about Philadelphia’s soda tax, read NACS Daily.