Philadelphia Becomes First Major City to Approve Soda Tax

PHILADELPHIA — Philadelphia became the first major city in the United States to institute a soda tax when the city council granted final approval to a 1.5-cents-per-ounce tax on sugar and diet beverages June 16, reported the Associated Press. The tax passed in a 13-4 vote and will go into effect Jan. 1.

The city plans to spend much of the estimated $90 million in new tax revenue next year on prekindergarten programs, community schools and recreation centers, according to Mayor Jim Kenney's plan.

"Thanks to the tireless advocacy of educators, parents, recreation center volunteers and so many others, Philadelphia made a historic investment in our neighborhoods and in our education system today. I commend the city council for working with these community leaders to make quality, affordable pre-K, community schools and systemic improvements to parks, rec centers and libraries a reality," Kenney stated. "I also thank my colleagues in the council for working with our administration to craft a shared agenda that will improve the education, health and prosperity of children and families all across our city for years to come. Today would not have been possible without everyone coming together in support of a fair future for every ZIP code."

The tax applies to distributors and not retailers, who are required to purchase from distributors specifically licensed to sell sugar-sweetened beverages, according to the Pennsylvania Food Merchants Association. Beverages excluded from the tax include those that contain 50 percent or more fruits or vegetables and those that contain 50 percent or more of milk-based ingredients.

Opponents of the tax included soda manufacturers and beverage industry groups, who funded ads against the tax proposal and argued that it would be too costly to consumers. The American Beverage Association (ABA) called the tax "discriminatory and highly unpopular," according to the report.

"The tax passed today is a regressive tax that unfairly singles out beverages, including low- and no-calorie choices," the ABA said in a released statement.

Although the tax will be included in the fiscal budget that starts July 1, ahead of the starting collection date, litigation challenging the tax is the likely next step.

Beverage bottler Harold Honickman announced plans to file a lawsuit to fight the tax as soon as this weekend.