People Are Still Traveling Outside Philly to Avoid Soda Tax, Study Finds

Sodas for sale in a refrigerated case

Photo by Marlith (license)

A new study from market research firm Catalina suggests what soda tax opponents have been saying all along: shoppers are going outside city limits to avoid Philadelphia’s sweetened-beverage tax.

The researchers, who say they take no position on the tax, looked at 109 million consumer transactions inside and outside of Philadelphia to determine the impact of the tax on retailers and certain beverage categories during the first five months of 2017. The team compared sales during these early months to sales during the same period in 2016 at hundreds of stores inside and outside of city limits.

Here are five key takeaways from the report: Read more »

Delco Wendy’s Was Charging Customers Philly Soda Tax

I’ve been waiting for this to happen… A business located outside of Philadelphia limits was recently caught adding the city’s controversial tax on sugary beverages to customers’ bills, multiple local outlets have reported.

Representatives from the Ridley Park Wendy’s say a software glitch caused cash registers to add the $0.45 surcharge meant for taxing beverages within Philadelphia to orders taken by the Delaware County franchise on Monday. The programming error lasted for several hours but has since been corrected. Read more »

Philadelphia Urges Pa. Supreme Court to Reject Latest Soda Tax Lawsuit

Photo by Radu Bercan/iStock

In a 59-page document filed by the City of Philadelphia, attorneys have urged the Pennsylvania Supreme Court to reject the appeal filed two weeks ago by the beverage industry in its third attempt to take down the Philadelphia Beverage Tax.

The American Beverage Association and other major industry players have opposed the tax since Jim Kenney and his team passed it last year. Although two prior attempts to dismantle the tax legally – one in Common Pleas Court and one in the Pennsylvania Commonwealth Court – haven’t ended well for the opposition groups, they’re hoping for better luck in round three, this time with the Pa. Supreme Court.

The American Beverage Association’s latest petition claims that leaving Philly’s soda tax intact would lead to an industry-threatening proliferation of similar legislation at the local level. According to the Philadelphia Business Journal, the city’s recent filing debates this claim, pointing out that municipalities will retain the same ability as always to create and debate their own legislation. Read more »

Six Months In, Philly Soda Tax Nets $39.3M, Just Shy of Projections

Sodas for sale in a refrigerated case

Photo by Marlith (license)

Philadelphia reached the six-month mark on its sweetened beverage tax in June, and the Philadelphia Department of Revenue has reported preliminary figures for the month, which closed out fiscal year 2017.

On Monday, a spokesperson for the city told Philadelphia magazine that the preliminary total for collections of the beverage tax in June is $6.9 million, bringing the preliminary FY17 total to $39.3 million.

The city brought in the second highest collection of the tax in June (behind March’s $7 million), but the preliminary figure also suggests that the city has missed its FY17 projection of $39.7 million, according to the Philadelphia Business Journal, which first reported the numbers.

“The preliminary FY17 total is only about $300,000 below the revised target,” city spokesman Mike Dunn told Philadelphia magazine on Monday. “We remain confident that the beverage tax is and will remain a reliable source of revenue, to the benefit of thousands of Philadelphia families and children.”

Dunn said the city doesn’t expect the final FY17 total to be substantially higher than the preliminary total. “Projections are always approximate — and we feel we essentially hit our target. In addition, we have consistently said that — as with any new tax — we need a full year of collections in order to make fair assumptions about month-to-month collections.” Read more »

Stop Using the Poor to Justify Your Hatred of the Soda Tax

Sodas for sale in a refrigerated case

Photo by Marlith (license)

For reasons that I’ll get into later in this column, I don’t eat a lot of pie. But over the Fourth of July weekend, I had a slice of sweet potato pie from ShopRite, and it was pretty decent.

Grocery store entrepreneur Jeff Brown owns a chain of ShopRite and Fresh Grocer stores in places throughout Philly mostly populated by people of color — places that were once designated as “food deserts.”

He’s also one of the leaders in the movement to repeal the city’s sweetened beverage tax. When you walk into any of his stores, a section filled with drinks not covered by the tax — complete with the largest sign in the world hanging overhead announcing their levy-free status — practically grabs you by the throat.

When I talked with him about it on a mutual friend’s Facebook page, Brown told me the tax needed to be abolished because it was costing jobs. My response was that it needed to stay because, as a former teacher for the School District of Philadelphia, I saw how badly kids in our city need pre-K.

Then Brown broke out the “this tax hurts poor people” talking point that tax opponents have been using, and I got angry. Read more »

Philly Soda Tax Upheld by Commonwealth Court

soda tax

istockphoto.com NoDerog

Pennsylvania Commonwealth Court voted today to uphold Philadelphia’s soda tax.

It’s the second legal win for the city since the American Beverage Association and local retailers filed a lawsuit against the 1.5-cents-per-ounce tax on sweetened beverages in September, claiming the levy is illegal because it effectively causes double taxation.

The tax was first upheld by a Common Pleas Court judge who dismissed the ABA’s lawsuit in December. The ABA appealed, but Commonwealth Court judges voted 5-2 vote to uphold the lower court’s decision. Read more »

OPINION: Philly’s Soda Tax Is Shaping Up to Be an Epic Flop

It’s been six months since the city’s soda tax (or, more accurately, the sugary beverage tax) was implemented — and it’s off to a rocky start.

The city is currently $20 million short of its projected $46 million goal to close out the 2017 fiscal year, and based on the most available month’s numbers, it doesn’t appear as though they will reach it.

But I’m not surprised by any of this. By the time last June when Mayor Kenney pulled a fast one on City Council to strike the deal, I had already warned about the consequences in lower-income communities.

Read more »

Philly Soda Tax Brings in Highest Collection Yet in March

istockphoto.com NoDerog

istockphoto.com NoDerog

The Philly soda tax brought in $7 million dollars in March, its third month in action, the Department of Revenue announced on Tuesday. The amount is the most the city has ever collected in a single month from the beverage tax.

The city collected $5.9 million for January, the first month, and $6.2 million for the month of February. The Department of Revenue says the March collection of $7 million is a preliminary figure and final numbers for the month will be available in May.

According to Philadelphia’s Five Year Plan released at the beginning of March, the city’s budget office projected that the tax would bring in $7.7 million each month until June, the end of fiscal year 2017. The preliminary figure falls below this estimate.

The Department of Revenue says it’s confident that it’ll reach the fiscal year 2017 collection goal of $46 million, which encompasses the first six months of the 1.5-cents-per-ounce sweetened beverage tax. For the full year, the city expects the tax to bring in more than $91 million. “We are satisfied with what has been a relatively smooth implementation and collection of the tax,” said revenue commissioner Frank Breslin in a statement. “Field investigators have found that a majority of businesses affected by the tax are compliant. We will continue our enforcement and compliance efforts to reach all those distributing sweetened beverages.”

To reach the $46 million goal for fiscal year 2017, the city still needs to collect about $26.9 million. That’s about $9 million in collections for the months of April, May and June. But Mike Dunn, a spokesman for the city, says the revenue department will be collecting funds for fiscal year 2017 well past the month of June. “Some of the payments that we receive after July 1 are actually related to activities that occur before the end of June,” Dunn told Philadelphia magazine. “All the [Philly Beverage Tax] payments received on July 20 will be related to activities prior to June 30, and some of the August revenues may also be attributed to before June 30.” 

The city says collections of the beverage tax are expected to fluctuate throughout the year because of factors like holidays, weather, and seasonal changes in soda consumption.

Follow @fabiolacineas on Twitter.

Philly’s Soda Tax Is Back in Court Today

FILE - In this Wednesday, June 8, 2016 file photo, opponents of a proposed sugary drink tax demonstrate outside City Hall in Philadelphia. Philadelphia is set to become the first major American city with a soda tax despite a multimillion-dollar campaign by the beverage industry to block it. The City Council is expected to give final approval Thursday, June 16, 2016, to a 1.5 cent-per-ounce tax on sugary and diet beverages. (AP Photo/Matt Rourke, File)

Opponents of a proposed sugary drink tax demonstrate outside City Hall on June 16, 2016. (AP file photo/Matt Rourke)

On Wednesday, a panel of Commonwealth Court judges in Pittsburgh will hear arguments over the legality of Mayor Kenney’s landmark sweetened beverage tax.

Levied just four months ago, the soda tax brought in about $12 million in its first two months to fund key city initiatives including pre-K expansion, the establishment of community schools and the revitalization of city parks libraries and recreation centers. The city expects to bring in $92 million each year with the tax.  Read more »

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