PHILADELPHIA -- Philadelphia on June 16 became the first major city in the nation to levy a tax on soda, tacking a 1.5-cent-per-ounce surcharge on all sweetened varieties, including diet drinks, according to a report in Restaurant Business.
Unlike other soda-tax efforts positioned as anti-obesity measures, Philadelphia posed its measure purely as a revenue booster rather than as a means of promoting public health.
It's expected to raise $91 million in its first year to fund pre-kindergarten programs, better education in grade schools and neighborhood recreation centers.
To maximize the revenue opportunity, the bill extends the tax beyond sugar-sweetened drinks to include beverages that eliminate calories by using artificial sweeteners.
The fee will be levied on distributors, who will presumably pass along the charge to customers such as retailers and restaurants. The tax will raise the cost of a 12-ounce soda by 18 cents.
Proponents of the soda tax—coming before the City Council for the third time—had sought a levy of 3 cents an ounce, but they backed off that level under fierce opposition from the beverage industry. The tax goes into effect Jan. 1, 2017.
A tax on sugary drinks is already in place in Berkeley, Calif., and soda taxes are under consideration in San Francisco and Oakland, Calif., and Boulder, Colo.
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