Philadelphia Becomes 1st Major U.S. City To Pass A Tax On Soda

Enlarge this image toggle caption Seth Perlman/AP Seth Perlman/AP

Philadelphia has approved a tax on soda — and it's the first major U.S. city to do so. Now, a legal fight is brewing between the city and the soda industry.

The ayes are 13. Nays 4

No. 160176 has passed #PHLCouncil — PHLCouncil (@PHLCouncil) June 16, 2016

The bill passed Philadelphia's City Council by a vote of 13-4.

Mayor Jim Kenney supported the tax. After the law passed, he called it "a historic investment in our neighborhoods and our education system."

As NPR's Allison Aubrey has reported, "One of the mayor's selling points in persuading the City Council to support the measure is that much of the estimated $91 million the tax would bring to the city's coffers each year would boost funding for programs including citywide pre-K education."

The new tax, which amounts to 1.5 cents per ounce, "will hit thousands of products, essentially anything bottled, canned or from a fountain with either sugar or artificial sweetener added, save for a few exceptions," as Philly.com reported.

The law lists these as examples of taxable products: "non-100%-fruit drinks; flavored water; energy drinks; pre-sweetened coffee or tea; and non-alcoholic beverages intended to be mixed into an alcoholic drink."

The exceptions include baby formula and products that are more than 50 percent milk, fruit or vegetable juice, according to the law. It is set to go into effect on Jan. 1, 2017.

Philly.com explains its affect on the cost of beverages:

"The tax will be levied on distributors. Only time will tell how much will trickle down to consumers. But all in, it could add up to 18 cents to the cost of a 12-ounce can, $1 to the cost of a 2-liter container, and $2.16 to the cost of a 12-pack."

The vote follows a fierce campaign against the tax from the beverage industry, according to The Associated Press.

In a statement after the bill passed, the American Beverage Association vowed to "take legal action to stop it," calling it a "regressive tax that unfairly singles out beverages, including low- and no-calorie choices." It added: "The fact remains that these taxes are discriminatory and highly unpopular — not only with Philadelphians, but with all Americans."

The association also argued that the tax is illegal. As Katie Colaneri of WHYY told our Newscast unit, the soda industry says it "violates the Pennsylvania constitution, which says a tax can't target a single item."

Katie reported that Mayor Kenney says he's ready for a fight: "We believe we're on strong legal ground. We'll see what they do, how they approach it. They spent a long time twisting the facts of this debate on television with millions of dollars so we'll fight the next fight when it comes."

He plans to sign the tax into law on Monday, Colaneri reported.

Berkeley, Calif., is the only other U.S. city with a similar tax — and that city has a population of about 112,000, compared with Philadelphia's 1.5 million people, as Allison reported. She adds that this law is historic and could set a precedent, especially after "other major U.S. cities — including New York and San Francisco — have tried and failed to pass similar measures."