ADEA State Update

Soda Tax Update

(Local Policy, Public Health) Permanent link   All Posts
  • Philadelphia

TaxSplashThe American Beverage Association, along with several Philadelphia residents and businesses, filed suit against the City of Philadelphia in September, arguing that the city’s new sugary beverage tax duplicates the state sales tax, rendering it illegal. A Common Pleas Court judge rejected their arguments and upheld the tax in December. The decision was appealed to Commonwealth Court, responsible for appellate cases involving local governments.

Philadelphia’s 1.5-cent-per-ounce tax on sugary beverages funds the city’s pre-K program and community schools, and helps pay for rebuilding parks and recreation centers citywide. While the tax is in litigation, the growth of those programs has been put on pause. And retailers are reporting losses due to the tax.

Pennsylvania state law prohibits Philadelphia from enacting taxes on items or transactions the commonwealth already taxes. The city’s sugary beverage tax is levied on distributors who sell and transport beverages to dealers for retail sale.

The question before the court is whether the soda tax constitutes a “double tax” on consumers because the cost is passed to them at the register, where they also pay sales tax. The city contends that the soda tax is not a “double tax” on consumers because the city’s sugary beverage tax is levied on the beverage distributors and the state does not tax the distribution of sweetened beverages.

On April 5, seven justices of the Commonwealth Court in Pittsburg heard arguments from both sides. To date, the court had not rendered an opinion on the case. 

  • Portland

Health advocates in Multnomah County (which includes Portland, OR) are working to gather the necessary 17,381 signatures from county voters to add a soda tax on the November ballot. The measure would add a tax of 1.5-cents-per-ounce on sugary drinks, including soda, energy drinks and sweetened teas.

  • Seattle

Seattle Mayor Ed Murray has proposed a two-cents-per-ounce tax be imposed on distributors of sugary drinks that is projected to raise $16 million per year and would help fund educational programs. To date, the proposed ordinance has not been introduced to the City Council for consideration.

Duggan Dental