Legal Issue

Whether the City of Philadelphia has the authority to implement a tax on soda and sugary drinks, levied on distributors of the products.

Overview

In 2016, the City of Philadelphia passed a tax on soda and sugary drinks, to be levied on distributors of the products, not directly on consumers, adding 1.5 cents per ounce to the cost of most sugary drinks. Several beverage groups challenged the tax as unlawful, including the American Beverage Association, the Pennsylvania Beverage Association and the Pennsylvania Food Merchants Association. They alleged, among other things, that Pennsylvania already imposed a 6 percent sales tax on many of the soft drinks that would be affected by the new tax. The trial court dismissed the complaint in its entirety and upheld the tax as a valid exercise of the City’s authority. The beverage industry then challenged the tax in appellate court, hoping to undo important public health and good government measures democratically adopted by the City. 

On March 10, 2017, the Public Health Law Center filed an amicus brief at the Commonwealth Court of Pennsylvania on behalf of the American Heart Association, supporting the City of Philadelphia’s authority to tax sugar-sweetened beverages. In addition to the Center, the brief was joined by fourteen national public health and medical organizations. Our brief describes the unique public health harms of the overconsumption of soda and sugary drinks, pointing out that, despite the sugar industry’s effort to undermine and confuse the science, the evidence is now unequivocal: Sugary drinks significantly increase risks for heart disease, diabetes, obesity, tooth decay, and other health problems plaguing Philadelphia and the country at large. Our brief argues that the City's act is a basic sin tax well within the City's authority and explains how adopting the beverage industry's arguments that the City is not within its authority to implement this tax could jeopardize the City's future public health measures.

In June 2017, the Commonwealth Court of Pennsylvania upheld the trial court’s ruling that the City’s tax did not violate state law. The Pennsylvania Supreme Court then issued an order saying it would hear an appeal by the industry, restaurants, and retailers. On April 13, 2018, the Public Health Law Center filed a second amicus brief supporting Philadelphia’s authority to tax sugar-sweetened beverages, this time at the Supreme Court of Pennsylvania. Led by the American Heart Association, our brief was joined by sixteen medical and public health organizations, including the American Cancer Society Cancer Action Network, the American Medical Association, the National Association of Chronic Disease Directors, Healthy Food America, and the National Association of County and City Health Officials.

Outcome

On July 18, 2018, the Pennsylvania Supreme Court upheld the Philadelphia soda tax, affirming the order of the Commonwealth Court.