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Philadelphia’s tax on soda and other sweetened drinks was upheld on Wednesday when the state’s highest court rejected a challenge by merchants and the beverage industry.
The Supreme Court ruled the 1.5-cent-per-ounce levy is aimed at distributors and dealers and does not illegally duplicate another tax. The four-justice majority said the state taxes sales at the retail level, a cost that falls directly on consumers.
The beverage tax raised nearly $79 million in 2017, over its first 12 months in place.
Both dissenting justices said the tax duplicates taxes already in place on retail sales of soda in the city, violating the Depression-era Sterling Act.
“A rose by any other name smells just as sweet, and, whether styled a retail tax or a distribution tax, the levy here at bar, like the state sales tax, raises revenue specifically by burdening the proceeds from the retail sale of sugar-sweetened beverages,” wrote Justice David Wecht, who dissented. “This the Sterling Act does not allow.”
If fully passed on to consumers, Philadelphia’s soda tax represents an increase of $1.44 on a six-pack of 16-ounce bottles.
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