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Philadelphia Votes in Soda Tax

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June 17, 2016

Philadelphia is the first major city in the U.S. to pass a tax on sugary drinks.

The City Council, by a 13-4 vote, approved the proposal to tax sodas and other drinks enhanced with sugar or artificial sweeteners by 1.5 cents an ounce. Mayor Jim Kenney had originally sought a 3-cent-an-ounce tax.

Revenues collected from the tax will go toward the city’s schools, libraries, and parks. Estimates that annual revenues could exceed $91 million.

The tax will apply to beverages that are bottled and canned, as well as those that come from soda fountains. Diet drinks are not to be excluded from the tax. Not only sodas but also teas, sports drinks, energy drinks, bottled coffees, and flavored water will be taxed. Exempted are baby formula and beverages for which more than half of the ingredients are milk or fresh fruit or vegetables.

First collections of the tax are scheduled January 1, 2017.

Opponents of the tax have promised legal challenges to the tax. The American Beverage Association has already spent nearly $5 million on advertising opposing implementation of the tax.

Proponents of the tax spent a bit more than $2 million on advertising supporting the tax. A large part of that was a donation from New York City Mayor Michael Bloomberg.

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