Soda Industry Fights Back Against Philadelphia’s Sugary Drink Tax

PHILADELPHIA (CBS) — As expected, the soda industry is fighting back against Philadelphia’s sweetened drink tax, passed in June.

A group of distributors, retailers and consumers filed suit in Common Please Court today.

The suit argues that the tax is illegal in a couple of ways.

One, it says state law prohibits local governments from taxing the same property that is the subject of an existing state tax, and the state already taxes soft drinks.

It warns local governments could begin taxing any number of items separately if Philadelphia is allowed to tax sweetened beverages.

The suit also argues that the state requires uniformity of taxes and the soda tax violates that by taxing by volume, not value.

The tax is one-and-half-cents per ounce, as opposed to a percentage of the price, as most sales taxes are.

The city had expected the challenge and made the tax take effect in January so the issues could be resolved. The money is to be used for universal pre-K, community schools and park rebuilding– projects already in the planning.

The city says it intends to vigorously defend the tax and is confident that it’s legal. It’s retained two outside lawyers to help with the defense: Ken Trujillo and Mark Aronchick, both former city solicitor.

Mayor Kenney has issued a statement calling the lawsuit, “repugnant,” but not surprising, given the millions the beverage industry spent to fight passage of the tax.

More from Pat Loeb

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