American Beverage Association Files Lawsuit Against Philadelphia Soda Tax

15 Sep 2016 --- The American Beverage Association has filed a lawsuit in an attempt to block the soda tax in Philadelphia. The trade association that represents Coca-Cola, PepsiCo and Dr Pepper, amongst other soft drink giants, has joined with business owners and residents to try to prevent the tax from coming into force next January.

Philadelphia leaders voted earlier this year to expand early childhood educational access and to provide additional funding for parks and recreation. The plan was to fund this through a 1.5 cents per ounce soda tax.

CEO of American Heart Association, Nancy Brown, says the organization was proud to be a leader in the support of these initiatives and of “the courageous action taken by the council.”  

The American Heart Association will continue to aggressively advocate for policy measures to make heart-healthy living easier in all communities. This includes supporting current sugary drinks tax campaigns in California, Colorado, Alabama and Illinois, according to Brown. 

Philadelphia mayor Jim Kenney and city solicitor Sozi Pedro Tulante reacted to the lawsuit filed against the city’s sweetened beverage tax (SBT), originally passed by city council in June, with a joint statement:

“We are ready and prepared to vigorously defend this legislation and to protect the historic investment planned for Philadelphia’s neighborhoods and education system,” says Tulante. “We have always been confident that the Sweetened Beverage Tax was a proper exercise of City Council’s authority and that it will be upheld in Court. We are currently in the process of reviewing the Complaint that was filed against the City of Philadelphia by the American Beverage Association and co-plaintiffs.”

The lawsuit argues Philadelphia cannot tax soft drinks because the beverages are already subject to a state sales tax. One part of the debate is whether the tax is unfair because it duplicates a sales tax and is therefore like a double taxation. 

“Pre-K, community schools and improved parks, recreation centers and libraries will give Philadelphia’s children the fair shot they deserve. 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. I have no doubt we’ll be successful in defeating lawsuit,” adds Mayor Kenney.

It was expected that the tax would bring in an estimated US$91 million a year. 

by Gaynor Selby