• The Pennsylvania Supreme Court has upheld a tax on sugar-sweetened beverages approved by the Philadelphia city council in 2016 (see previous blogs here, here and here for background information on that tax and court challenges to the tax). Opponents of the tax had argued that the tax violated Pennsylvania’s Sterling Act of 1932, which prohibits cities from taxing items that are taxed by the state. In a 4-2 decision, the Supreme Court found that the city’s sweetened-beverage tax did not duplicate the state’s sales tax since the city’s tax is levied on distributors.
  • In its ruling, the Pennsylvania Supreme Court left open the possibility of defeating the tax through legislation (Philadelphia Magazine). The ruling stated, “The concern that unintended consequences may unfold are prevalent relative to the promulgation of experimental, remedial legislation such as the Sterling Act. Where the language of the governing statute is clear (or clear enough), however, the solution is legislative — and not judicial — adjustment. In this regard, this Court regularly alludes to the superior resources available to the General Assembly in assessing matters of social policy.”
  • A bill currently before the Pennsylvania legislature, HB 2241, would prohibit local jurisdictions from taxing food, beverages, and food and beverage containers. However, no action has been taken on the bill since it passed out of committee in May. Three states have passed similar bills. In October 2017, Michigan’s governor signed a bill prohibiting municipalities from levying local taxes on food and beverages. The following year, in March 2018, Arizona’s governor signed a bill prohibiting local jurisdictions from imposing taxes on soda or sugary drinks. Most recently, California’s governor signed a bill prohibiting local governments from imposing new taxes on groceries (see our July 2 blog).
  • We will continue to report on local jurisdictions’ efforts to bridge budget gaps and to fund various programs through sugar-sweetened beverage taxes, and on state bans of local taxes on food and/or sugar-sweetened beverages.