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Philadelphia Soda Tax Sparks Protests

  • May 5, 2016 | Gail Cole

 Will a soda tax make people consume less?

Philadelphia’s proposed tax on sugary drinks has people up in arms. In the hours leading up to a public hearing on the tax at City Hall, 18-wheelers boasting soda brands surrounded the building and honked their horns. Anti-tax protesters waved signs reading “No Philly Grocery Tax!” Pro-tax supporters countered with signs of their own: “Our kids are worth it!”

It continued inside the building, minus the trucks. People spoke passionately for and against the proposed 3-cents-per-ounce tax. Small grocers worried about their businesses, saying that people would purchase their soda outside city limits to avoid the tax. Some fear they will lose their jobs, which would impact their families. On the other side, parents spoke passionately about the health of their children. We need to “give our children a chance,” said one father.

Will a tax actually reduce consumption? The jury is still out. Consumption initially declined after the imposition of Mexico’s soda tax in 2014. According to the New York Times, “After one year, sales of sugary beverages in the country fell as much as 12 percent while bottled water purchases rose 4 percent.” But recent data shows that sales are on the rise. The country’s largest Coke bottler, Coca-Cola Femsa SAB, said its Mexican soda volumes rose 5.5% in the first quarter of 2016. The second largest bottler has seen an increase of 11%. The 1-peso-per-liter tax has generated more than $2 billion since it was imposed — a sure sign that consumption continues.

Mayor Kenny told news reporters that he believes he has enough support in the city council to pass the tax. A decision is expected next month. If approved, the tax will take effect July 1.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.