With judges split 5-2, the Pennsylvania Comonwealth Court upheld Philadelphia’s 1.5-cent-an-ounce tax on sweetened beverages, the second win in court by the city, said Philadelphia Magazine. “Still, the ruling doesn’t conclude the soda tax war,” said the magazine, because the American Beverage Association and local businesses could appeal to the state Supreme Court.
The trade group says the tax is an impermissible instance of double taxation. A Common Pleas Court judge rejected that idea last December, leading to the new ruling. Mayor Jim Kenney, who proposed the tax as a way to pay for pre-K for city children and to renovate parks, said rulings show the tax stands on solid legal grounds. “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,” said the mayor.
The ruling came one day after Kenney’s office said that tax collections were unlikely to reach the estimated $46 million for this fiscal year, which ends this month, said news site Billy Penn. The city will hold on to its projections of $91 million in revenue in fiscal 2018 and a total of $450 million over five years. The anti-tax group Ax the Bev Tax said “this tax is not a sustainable source of revenue for the city.” Many stores have reported a decline in beverage sales, said Billy Penn, yet wage tax revenue is up for the food sector, suggesting a limited impact.