Is Philly's Sugary Drink Tax Legal?
PHILADELPHIA (CBS) -- Mayor Jim Kenney is set to sign the Sugary Drink Tax into law on Monday. Critics have called the tax unconstitutional and they are preparing for a legal fight.
But, do opponents of the measure actually have a legal leg to stand on?
Effective January 1, beverage distributors will be taxed 1.5 cents per ounce of sugary and diet beverages distributed throughout Philadelphia. City Council gave their final vote on Thursday, right after opponents vowed to take immediate legal action.
"We believe we're on strong legal ground," Mayor Kenney. "We'll see what they do, how they do it, how they approach it."
Mayor Kenney says that the tax will raise over $90 million a year to fund expanded pre-k and other community projects, but critics raised concerns after it was revealed that a small portion will go to the city's general fund.
The bigger question now centers on whether or not this is legal.
First, the state already taxes sweetened drinks and Pennsylvania law overrides city law.
"The response to that by the city and city council is that this isn't a sales tax. It's a tax on distributors," said constitutional law attorney Matt Haverstick. The other issue he explained has to do with the commonwealth's uniformity clause. "It means that a tax has to be applied uniformly and evenly across the board. This tax is in for a significant amount of litigation and who knows how many years that will take."
The reason we say that Philadelphia is the first major U.S. city with this type of tax is because, in 2014, Berkeley, Ca. did so at one cent per ounce. A study from Cornell University found that, on average, prices went up just .5 cents.
