Controversial Philadelphia Soda Tax Upheld by Court

Tax on sugary drinks gets approval from Pennsylvania Supreme Court.
July 23, 2018

PHILADELPHIA – In a 4-2 majority opinion, the Pennsylvania Supreme Court has upheld Philadelphia’s 1.5-cents-per-ounce tax on soda and other sweetened beverages, according to the Philadelphia Inquirer.

In 2016, the City of Brotherly Love became one of the first major municipalities to levy a tax on sweetened beverages. Opponents of the tax claim that this results in double taxation since it is passed down to consumers who already pay sales tax on the drinks.

City officials expected to collect more than $78 million from the tax in the current fiscal year but realized less than the projected amount. That resulted in the city lowering estimates by 15% and downsizing plans for programs that the tax funds. Revenue is expected to decrease over time as soda consumption declines.

In a climate of strong opposition to soda taxes, Cook County, Illinois, repealed a similar tax last fall. As reported in NACS Daily, California recently passed a law allowing existing soda taxes in cities such as San Francisco and Berkeley to remain in place, while banning all other locales from passing new ones.

Since 2009, the beverage industry has spent an estimated $48.9 million on “no soda tax” campaigns around the country. Critics claim the tax is merely a money grab disguised as a concern over public health. Meanwhile, beverage manufacturers have responded by producing smaller-sized cans.