In a 12-4 vote, the Philadelphia City Council approved a 1.5-cent per ounce tax on sugar-sweetened beverages sold in Philadelphia city limits. The bill was signed by Mayor Jim Kenney in June.
The tax, which was originally set at three cents per ounce, covers any beverage containing sugar or another sweetening agent. It was expanded to include sweeteners typically found in diet beverages. Syrup used for beverages was originally taxed at 27 cents per ounce, but will now be taxed at 1.5 cents per ounce for the amount of syrup typically needed for the resulting beverage.
The majority of the revenues generated from this tax will be dedicated to citywide pre-Kindergarten programs. In a surprising announcement to some, the city’s revenue director announced that some of revenues would be directed to the city’s dwindling general fund, leading many to surmise that it would be a key factor in upcoming negotiations with the city’s municipal union. This led many council members on the fence to reconsider and vote in favor of the tax.
PFMA and its members had vehemently opposed the tax by joining the No Philly Tax Coalition, signing petitions; writing letters, calling and meeting with council members to voice their opposition; posting signs and bottle toppers in their stores to make their customers aware of the proposed tax; and participating in a rally at city hall.
This fight is far from over, though. The No Philly Grocery Tax coalition has announced its intentions to sue the city for overstepping its legal authority to levy this tax. Their argument will likely be that this is effectively a duplicative tax, which is disallowed in the city’s home rule charter without express permission from the Pennsylvania General Assembly, as it is for additional sales tax and cigarette taxes in Philadelphia. The city will likely counter that as the tax is directed at distributors, it is not duplicative.
PFMA thanks all members that were especially vocal in contacting their council members. PFMA will continue to keep members informed of the litigation process.
The tax, which was originally set at three cents per ounce, covers any beverage containing sugar or another sweetening agent. It was expanded to include sweeteners typically found in diet beverages. Syrup used for beverages was originally taxed at 27 cents per ounce, but will now be taxed at 1.5 cents per ounce for the amount of syrup typically needed for the resulting beverage.
The majority of the revenues generated from this tax will be dedicated to citywide pre-Kindergarten programs. In a surprising announcement to some, the city’s revenue director announced that some of revenues would be directed to the city’s dwindling general fund, leading many to surmise that it would be a key factor in upcoming negotiations with the city’s municipal union. This led many council members on the fence to reconsider and vote in favor of the tax.
PFMA and its members had vehemently opposed the tax by joining the No Philly Tax Coalition, signing petitions; writing letters, calling and meeting with council members to voice their opposition; posting signs and bottle toppers in their stores to make their customers aware of the proposed tax; and participating in a rally at city hall.
This fight is far from over, though. The No Philly Grocery Tax coalition has announced its intentions to sue the city for overstepping its legal authority to levy this tax. Their argument will likely be that this is effectively a duplicative tax, which is disallowed in the city’s home rule charter without express permission from the Pennsylvania General Assembly, as it is for additional sales tax and cigarette taxes in Philadelphia. The city will likely counter that as the tax is directed at distributors, it is not duplicative.
PFMA thanks all members that were especially vocal in contacting their council members. PFMA will continue to keep members informed of the litigation process.
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