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Dan Levy/Billy Penn

Pennsylvania Commonwealth Court upholds Philly soda tax

Yes, there could still be another appeal.

coke-soda_20170504_160124
Dan Levy/Billy Penn
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Philly’s soda tax has been upheld by the Commonwealth Court.

The state appeals court today upheld a lower court decision that ruled the city’s sugar-sweetened beverage tax is legal under Pennsylvania law, siding with Mayor Jim Kenney’s administration.

The Court released its opinion today, with five judges in favor and two dissenting. Seven members of the nine-judge panel were in attendance for an hour-long hearing over the matter in April. Judge Michael H. Wojcik wrote the court’s opinion.

The lawsuit — filed by the American Beverage Association, Philadelphia residents and business owners last fall — centers around the city’s 1.5-cent-per-ounce soda tax on beverage distributors that was approved last year by the Philadelphia City Council and signed by the mayor. The levy was put in place, according to the mayor’s administration, to fund projects like universal pre-K, community schools and a project to rebuild the city’s libraries, parks and community centers.

But the American Beverage Association and its allies have claimed the tax is illegal, as state law doesn’t allow municipalities to levy taxes on items that are already taxed at the state level. In December, a Common Pleas Court judge ruled against the ABA, and the plaintiffs appealed to the Commonwealth Court, one of Pennsylvania’s two intermediary appellate courts.

Wojcik wrote the majority believes the beverage tax does not violate the state’s uniformity clause and that it sides with the trial court’s ruling. In a dissenting opinion, Judge Anne Covey wrote that “[c]ontrary to the Majority’s conclusion that the [Philadelphia Beverage Tax] is a ‘distribution’ tax, the PBT is a tax imposed only where the sugar-sweetened beverage is sold or intended to be sold at retail, and the PBT is imposed regardless of whether there is a distributor involved.”

Plaintiffs in the lawsuit plan to appeal to the state’s Supreme Court, according to a spokesman for the Ax the Philly Bev Tax Coalition.

Kenney released a statement this morning in response to the Court’s decision, saying “the Philadelphia Beverage Tax stands on solid legal grounds.”

“As I stated when the beverage tax was upheld in Common Pleas Court, the children of Philadelphia are waiting for the opportunities that the tax can provide,” he continued.

The city’s Ax the Philly Bev Tax Coalition released a statement saying it’s “disappointed” in the court’s ruling and that “no ruling can obscure the pain Philadelphia’s beverage tax continues to inflict on families and local businesses.”

While the tax has remained in place as the case snakes through the court system, progress on the programs it was expected to fund has slowed.

Here’s the full opinion from the Commonwealth Court: