Court upholds Philadelphia’s tax on sweetened drinks
An appeals court on Wednesday upheld Philadelphia’s 1.5-cent-per-ounce tax on sweetened beverages, saying it does not duplicate Pennsylvania’s state sales tax.
Under Pennsylvania law, cities cannot tax transactions, subjects or property that are already taxed by the state.
Restaurants, beverage distributors and others in the industry had sued the city, claiming its new tax violated that prohibition.
Commonwealth Court’s 5-2 decision said the beverage tax, imposed on distributors, does not hit the same subject or people as the sales tax. The court backed a decision by a city judge in December.
The levy, the majority said, “taxes nonretail distribution transactions and not retail sale to a consumer,” and it merely has the same related subjects as the sales tax.