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Judge Dismisses Lawsuit Challenging Philly Soda Tax

Posted On: 12/22/2016

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TAGS: Philadelphia soda tax, Jim Kenney, vending, soft drinks, Judge Gary S. Glazer, Philadelphia soda tax lawsuit

PHILADELPHIA -- A Philadelphia judge on Dec. 19 dismissed the beverage industry's lawsuit against the city of Philadelphia over its passage of a soda tax, which will take effect on Jan. 1.

Philadelphia became the largest American city to enact a tax on sugary drinks and diet sodas when Mayor Jim Kenney signed it into law on June 8. Only Berkeley, CA, has a similar a tax. Philadelphia's tax is expected to generate about $91 million annually.

The new law will tax sodas and beverages with added sugar at a rate of 1.5¢ per fl.oz. It requires distributors, restaurants and vending machine operators to collect the tax and remit it. | READ MORE

The American Beverage Association and other groups filed a lawsuit in September to challenge the tax as unlawful. The plaintiffs argued that Pennsylvania already imposes a 6% sales tax on many of the same soft drinks that would also be affected by the sweetened beverage tax. They also argued that the new tax violated a federal mandate targeting Supplemental Nutrition Assistance (SNAP) funds. According to the complaint, the sweetened beverage tax could affect the state's ability to collect and distribute SNAP funds.

In his ruling, issued on Dec. 19, Judge Gary S. Glazer dismissed the lawsuit "in its entirety." He ruled that the sweetened beverage tax does not duplicate the state's sales and use tax or affect its ability to collect and distribute SNAP funds. Glazer also said the new tax does not violate the state constitution's uniformity clause, as the plaintiffs had also charged.

Former Philadelphia Mayor Michael Nutter previously pushed for a soda tax, but had not been able to garner the necessary support from the City Council.