Following up on our blog posts on March 29 and July 7 of 2016 about the Philadelphia Beverage Tax on Sugar-Sweetened Beverages (the "PBT"), a challenge to that tax in the Court of Common Pleas of Philadelphia County has been defeated in a decision by Judge Glazer on December 19. The plaintiffs included beverage distributors, the American Beverage Association, the Pennsylvania Beverage Association, the Philadelphia Beverage Association and the Pennsylvania Food Merchants Association. The court rejected the plaintiffs' arguments ruling that the PBT does not duplicate Pennsylvania's sales and use tax, violate the Pennsylvania Constitution's Uniformity Clause, nor force beneficiaries of the federally funded Supplemental Nutrition Assistance Program ("SNAP") to spend the program's funds on the PBT.
To follow up on some of the logistics of the tax, distributors are generally responsible to pay the tax. If the dealer is not a registered distributor and has not paid the tax, the dealer (who is selling the beverages through retail sale) must pay the tax. The PBT requires that the distributor give a receipt to the dealer which details "the amount of sugar-sweetened beverage supplied in the transaction and the amount of tax owing on such a transaction".
So, it looks like the tax will be coming into effect on January 1, 2017, imposing a tax of 1.5 cents per fluid ounce on sugar-sweetened beverages (which, as noted in my prior blog, are not all truly sugar-sweetened).
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