Starting January 1, 2017, sweetened beverages will be subject to a new tax in Philadelphia. On Thursday June 16, 2016, the City Council voted 13 – 4 to impose what is being called the soda tax, officially known as the “Sugar-Sweetened Beverage Tax.” The tax applies to non-alcoholic beverages and concentrates that contain either caloric or non-caloric sweeteners.
The tax does not apply to several classes of beverages including baby formula, a beverage which is more than 50% milk, or one that is more than 50% fresh fruit and/or vegetables. The tax also does not apply to unsweetened drinks to which the purchaser can add, or request that the seller add, sugar, at the point of sale.
Beverages that will be subject to the tax include soda, sports drinks, energy drinks, pre-sweetened coffee and tea, and non-alcoholic beverages intended to be mixed into an alcoholic drink.
The tax rate will be $0.015 (one and a half cents) per fluid ounce for beverages and a rate per ounce on syrups and other concentrates that will yield one and a half cents per fluid ounce of the resulting beverage. The tax is imposed at the wholesale level, to be collected by distributors on their sales of beverages. Distributors will be required to report the amount of their quarterly sales of sugar-sweetened beverages and syrups.