City Hall Educates Distributors, Retailers On Impending Soda Tax
PHILADELPHIA (CBS) - The city of Philadelphia received national publicity when it became the first major U.S. city to pass a tax on sugary soft drinks. The 1.5 cents-per-ounce beverage tax is scheduled to be imposed, starting January 1st.
Now, City Hall is laying out how distributors should comply.
Mayor Jim Kenney's team is reaching out to about 1,000 area distributors on the need to register, adding it's mandatory, as the beverage tax will be levied on them:
"I know new taxes are never fun," he says. "But with your cooperation, we are funding Pre-K, community schools and massive improvements to parks, recreation centers and libraries."
Distributors sell wholesale to retailers, including neighborhood grocery or convenience stores and small bodegas, who in turn sell to consumers.
Revenue Commissioner Frank Breslin says investigators and auditors will enforce compliance:
"With retailers, we'll be looking at invoices to determine if they're purchasing from registered distributors."
The Mayor says if they are caught buying beverages from a non-registered distributor, they'll be responsible for a $1,000 fine for each occurrence, plus playing the tax.
It will be up to distributors to decide whether to pass along the costs to retailers. It remains unknown how much might be passed on to consumers, but a study of how the soda tax fared in Berkeley California – the first such city ordinance in the country - showed about 50-percent of the cost increase was passed on to consumers.
The beverage industry and a coalition of merchants filed a lawsuit to block the soda tax. No court date has been scheduled on the legal challenge.
Mayor Kenney feels vindicated by the referendums just passed in other cities for by-the-ounce soda taxes, including San Francisco, Oakland (one-cent-per-ounce tax), and Boulder (two-cent tax). The Cook County Board of Commissioners, which includes Chicago, also just approved a (penny-per-ounce) beverage tax.
