Judge dismisses attempt to block Philadelphia beverage tax

by Ron Sterk
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Soda tax
Philadelphia’s beverage tax is set to go into effect on Jan. 1, 2017.

PHILADELPHIA — A judge on Dec. 19 dismissed legal attempts by the beverage industry, retailers and others to block Philadelphia’s beverage tax that is set to go into effect on Jan. 1, 2017, according to a report in The Wall Street Journal.

Judge Gary Glazer of the Philadelphia Court of Common Pleas rejected efforts to block the tax by plaintiffs who argued in part that the tax was unconstitutional because beverages already were subject to state sales tax and Pennsylvania law prohibits cities from imposing duplicate taxes. Judge Glazer dismissed the lawsuit in its entirety.

Judge Gary Glazer, Philadelphia
Judge Gary Glazer of the Philadelphia Court of Common Pleas

The Pennsylvania Food Merchants Association, a plaintiff in the case, indicated the industry coalition fighting the tax would appeal the judge’s decision.

The American Beverage Association, the Pennsylvania Beverage Association, Teamsters Local 830 and several small businesses jointly filed suit Sept. 14 in an effort to block the 1.5c-per-oz tax on sodas and several other drinks. The suit sought to enjoin and declare the tax invalid on the grounds it violated state law, terms of a federal nutrition assistance program and other reasons. In addition, the plaintiffs said the tax was regressive and harmful to small businesses and will “meaningfully diminish the everyday purchasing power of Philadelphia residents.”

Unlike most other existing or proposed soda taxes in other cities that are aimed at combatting obesity, diabetes and other health issues or increasing nutrition education, the Philadelphia tax was created for the purpose of raising revenue, according to both proponents and opponents. It is expected to generate more than $91 million annually. The tax was approved by the Philadelphia City Council in June. Also, unlike other existing or proposed soda taxes, the Philadelphia tax applied to both caloric and non-caloric sweetened beverages and juice drinks that were less than 50% milk or real juice. Other soda taxes apply only to caloric-sweetened drinks.

Soda tax chart
The tax would add $2.16 to a 12-pack of sodas, $1.02 to a two-liter bottle of soda and 90c to a 10-pack of 6-oz juice boxes.

It is estimated that the tax would add $2.16 to a 12-pack of 12-oz soda cans, $1.02 to a two-liter bottle of soda and 90c to a 10-pack of six-oz juice boxes.

Boulder, Colo., and San Francisco, Oakland and Albany, Calif., all passed soda taxes in November, joining Berkeley, Calif., which passed a soda tax in 2014, and the Navajo Nation. Cook Country, Ill., also has a soda tax planned, which like the Philadelphia tax, is aimed at raising revenue. 
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