PHILADELPHIA -- Philadelphia Mayor Michael Nutter has proposed adding a 2-cents-per-ounce tax on sweet beverages in an effort to combat obesity and raise funds for the city, the Philadelphia Inquirer reports.
The tax would apply to any sweetened drink, such as soda, energy beverages, iced tea, chocolate milk, and fountain drink syrup and powders (where the tax would be based on number of liquid ounces produced). Exempt would be diet drinks without added sugar and baby formula.
City officials estimate such a tax might garner $77 million annually. City Health Commissioner Donald F. Schwarz, a pediatrician, projected that a normal city resident downs a half-liter of sweet beverages daily.
Despite its name of the Healthy Philadelphia Initiative, the city would use $57 million--nearly all the funds raised€"for general purposes, with $20 million going each year to new campaigns focused on healthful eating and exercise.
"For the average individual in town, if this is passed on, we believe that we can make them healthier simply though substitution for healthier beverages," said Schwarz.
The Pennsylvania Beverage Association and the Teamsters have aligned to fight the proposed tax. "Philadelphians already pay the highest sales tax in the state, and this would increase the cost of the beverages they enjoy by as much as a staggering 100 percent," said Tony Crisci, lobbyist for the Pennsylvania Beverage Association.
It€™s unclear whether the city council will support the mayor€™s proposal. Seven states (link: http://www.nacsonline.com/NACS/News/Daily/Pages/ND0219102.aspx), including California, Massachusetts and New York, are considering taxing soda, but Nutter€™s proposal is the highest tax rate thus far.
Read about how a soda tax would impact retailers in "It€™s a Sin Tax" from the December issue of NACS Magazine.