By Pat Loeb

PHILADELPHIA (CBS) — A Commonwealth Court panel will hear arguments, Wednesday, in a lawsuit seeking to have Philadelphia’s beverage tax declared illegal.

This will be the first time that lawyers for the city and the beverage industry actually argue their respective cases. Common Pleas judge Gary Glazer ruled the tax legal, based on briefs by the two sides.

The Commonwealth Court panel, though, will hear arguments on the appeal. Sitting in Pittsburgh as part of a regular rotation, they will quiz the lawyers for each side.

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The beverage industry brought the suit, claiming the tax violates state law that taxes must be uniform and that local governments cannot tax items already taxed by the state.

The city argues that, because the tax is levied on distributors and not retailers, it does not conflict with state law.

Whichever side loses in Commonwealth Court is expected to appeal to the state Supreme Court.

The one-and-a-half cent an ounce tax took effect January first and raised $12Million in its first two months.

The city hopes it will raise $91million annually to pay for Mayor Jim Kenney’s anti-poverty program of universal pre-K, community schools and a rebuild of city parks, rec centers and libraries.

Bottlers and retailers have blamed it for a drop in sales and say they will have to lay off workers and cut hours as a result.