PHILADELPHIA (WTXF/AP) - A Pennsylvania appeals court upheld Philadelphia's controversial tax on sweetened beverages on Wednesday, according to website Law360.
The court rejected arguments the levy was a legally impermissible duplication of the state's sales tax. The Commonwealth Court upheld the same conclusions reached by a Philadelphia judge.
In late December, Common Pleas Court Judge Gary S. Glazer threw out a lawsuit filed by the American Beverage Association and other challengers looking to stop the city's 1.5-cent-per-ounce tax on sugary drinks and diet sodas just before it started Jan. 1.
Mayor Jim Kenney put out this statement:
“Two courts have now considered the arguments of the beverage industry and both are certain that the Philadelphia Beverage Tax stands on solid legal grounds. As I stated when the beverage tax was upheld in Common Pleas Court, the children of Philadelphia are waiting for the opportunities that the tax can provide. Our entire city desperately needs us to be able to move forward with the programs funded by the tax and we will be unable to do that in full until full legal action is resolved. The beverage industry needs to see this ruling for what it is – a clear statement Philadelphia has the right to try to provide for its own – and cease the legal and public relations battle to which it has devoted millions. The beverage industry should not ask our children to wait another minute.”
City Solicitor Sozi Pedro Tulante said:
“The Commonwealth Court judges gave thorough consideration to the plaintiffs’ claims and an overwhelming majority came to the same conclusion as Common Pleas Court: that the American Beverage Association’s arguments are without merit. In doing so, the Commonwealth Court affirms the Court of Common Pleas’ ruling that City Council had full legal authority to enact the Philadelphia Beverage Tax and that the tax is lawful. We appreciate the judges’ exhaustive examination of the matter, and urge plaintiffs to set aside a legal action that now has been soundly rejected by two courts.”
News for the city wasn’t all good.
It lowered its money projections, saying the tax will bring in less than it had anticipated.
The Philadelphia Inquirer reported the tax in effect since January brought in $25.6 million, but won’t make $46.2 million total for the fiscal year ending June 30.
Next, the mayor's office says it’ll lower the revenue projection in a five-year plan to be presented later this month. But city spokeswoman Lauren Hitt said officials still believe they will hit their fiscal year 2018 projection of $92 million.
The tax is imposed at the distributor level, and if fully passed on to the consumer, amounts to $1.44 on a six-pack of 16-ounce bottles.