By AMERICAN HEART ASSOCIATION NEWS
As it promised to do, the beverage industry filed a lawsuit Wednesday to block Philadelphia’s soda tax.
The American Beverage Association, along with restaurants and some consumers who joined in the suit, contend the city’s tax — to take effect in January — duplicates the state sales tax already imposed on soda.
The beverage industry fought the 1.5-cent-per-ounce tax before it was approved in June by the Philadelphia City Council. The American Heart Association and Philadelphians for a Fair Future were among the supporters of the tax measure, which amounts to about 18 cents on a 12-ounce can of soda.
The complaint filed Wednesday also says the new tax, which proponents say would be used for early education, parks and recreation, would violate the state constitution’s uniformity of taxation requirement because it is based on volume and not price. The result, according to the lawsuit, is that “shockingly different and regressive tax rates are imposed” on larger, less expensive drinks versus smaller, pricier drinks.
“Philadelphia has lots of ways to raise revenue, but this tax on beverages is plainly illegal,” said the beverage industry’s attorney Shanin Specter with Philadelphia personal injury firm Kline & Specter.
Examples of sugar-sweetened beverages that would be taxed, include: Soda (regular and diet); non-100 percent-fruit drinks; sports drinks; sweetened water; energy drinks; pre-sweetened coffee or tea; and non-alcoholic beverages intended to be mixed into an alcoholic drink.
Drinks that would be excluded, include: 100 percent fruit juice; drinks with more than 50 percent milk; medical foods; and baby formula.
In all, supporters said the tax on would bring in about $90 million in new tax revenue next year.
Mayor Jim Kenney pledged to spend most of that on pre-Kindergarten, community schools and recreation centers, and the city voted to expand the programs earlier this year.
American Heart Association Chief Executive Nancy Brown said the lawsuit is “disappointing.”
“The trade association representing America’s leading beverage companies — Coca-Cola, Pepsi and Dr Pepper — shouldn’t be actively working to defund early childhood education and parks and recreation opportunities for Philadelphia’s families,” Brown said. “The American Heart Association looks forward to working with the public health community to support the city of Philadelphia as it defends itself against this unnecessary and unfortunate lawsuit.”
Kenney said he wasn’t surprised his city was hit by the lawsuit, but is sure it will be defeated.
“While it is repugnant that the multi-billion-dollar soda industry would try to take away these educational and community programs from the hundreds of thousands of Philadelphians who need them, we were not surprised by their lawsuit given the ten million dollars they have already spent opposing the tax,” he said.
The move to curb and tax sugar-sweetened drinks has been spreading. According to the beverage association, tax proposals have been rejected 43 times across the country in the past eight years.
The city of Berkeley, California, began collecting a voter-approved soda tax in 2015. Its neighbors in San Francisco, Oakland and Albany are slated to vote on a penny-per-ounce tax this November. Voters in Boulder, Colorado, are considering a 2-cents-per-ounce tax this fall.
The AHA, “will continue to advocate aggressively for policy measures to make heart-healthy living easier in all communities,” Brown said. “This includes supporting current sugary drink tax campaigns in California, Colorado, Alabama and Illinois.”