On June 16, 2016 the Philadelphia City Council passed, and on June 20, 2016 Philadelphia’s mayor signed, into law a new chapter into The Philadelphia Code entitled” Sugar-Sweetened Beverage Tax”. The mayor had proposed a tax on soda and other sugar-sweetened beverages last March (see blog of Marcy 29, 2016 entitled “Philadelphia Mayor Proposes Soda Tax), and, though modified, the tax will apply on January 1, 2017 and thereafter.
Instead of the original tax proposed of three cents per ounce, it is 1 1/5 cents per ounce. As originally reported, the tax must be paid by the distributor of the “sugar-sweetened beverage”. However, it is important to note that a “sugar-sweetened beverage” is not only any non-alcoholic beverage sweetened by sugar and the like, but also by an artificial sugar substitute, like saccharin or aspartame. It explicitly includes sports drinks, flavored water and pre-sweetened coffee or tea as well as soda.
There are application and notification requirements for distributors and dealers of “sugar-sweetened beverages” within the new law, so it is important for franchisors and franchisees who do business in Philadelphia to comply with these requirements. Once we know the parameters of the scope of these requirements, we will follow up with another blog post.