Philadelphia approves tax on soft drinks.

  • As previously covered on this blog, stakeholders have been monitoring the degree of interest in, and the potential effectiveness of, sugar “sin taxes” here in the U.S.  In 2014, Berkeley became the first city to pass an excise tax (1 penny per ounce) on sugar-sweetened beverages.
  • On June 16, 2016, the Philadelphia city council voted 13-4 to approve a 1.5 cent per ounce tax on sugar-sweetened beverages.  The tax will cover a variety of beverages, including soda and diet soda, non-100% fruit drinks; sports drinks; flavored water; energy drinks; pre-sweetened coffee or tea; and non-alcoholic beverages intended to be mixed into alcoholic drinks.  The tax will be levied on distributors, and the city is slated to begin collecting tax revenues on January 1, 2017.  Philadelphia’s mayor has indicated that the goal of the tax is revenue generation, but public health advocates are lauding the potential benefits from the standpoint of reducing sugar consumption.
  • The reaction to Philadelphia’s tax is predictably mixed, with the American Beverage Association (ABA) opposed to the measure while the Center for Science in the Public interest is in favor.  Industry stakeholders and public health advocates also have voiced divergent predictions regarding whether taxes of this nature are likely to take root in other U.S. jurisdictions.  The ABA has stated its intent to take legal action to stop implementation of the tax, arguing that the city has overstepped its taxation authority in violation of Pennsylvania’s state constitution.

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