Mayor hails rejection of suit against Philadelphia soda tax

A judge has dismissed a lawsuit aimed at blocking a tax on sodas set to take effect in Philadelphia next month and intended to benefit educational and neighbourhood initiatives.

Common Pleas Court Judge Gary Glazer on Monday rejected the suit filed by the American Beverage Association and others, The Philadelphia Inquirer reported.

The 1.5-cent-per-ounce tax amounts to 18 cents on a 12-ounce can of soda or $1.44 on a six-pack of 16-ounce bottles. Berkeley, California, has a similar soda tax, while Chicago taxes retail soft drink sales and fountain drinks. But soda tax proposals have failed in more than 30 cities and states.

Democratic Philadelphia Mayor Jim Kenney has pledged to spend most of the estimated $90 million in new tax revenue next year to pay for pre-kindergarten, community schools and recreation centres.

The lawsuit filed by beverage industry groups, restaurants and consumers argued the tax on both sugary and diet beverages duplicates the state sales tax already imposed on soda and is unfairly based on volume, not price, resulting in a higher tax rate on soda than on more expensive energy or coffee drinks. The suit contends the tax would harm city residents and disadvantage businesses that sell soft drinks compared to companies just outside city limits.

The plaintiffs have vowed an appeal to the state Supreme Court, but Kenney urged them to accept the judge's ruling, calling on them to "do the right thing for the children of Philadelphia, many of whom struggle in the chilling grip of pervasive poverty.''

"The industry has chosen not to challenge beverage taxes in other municipalities and there is no reason to continue pursuing it here,'' the mayor said in a statement.