Extras on Excise: Is High Fructose Corn Syrup, Bad For Your Pocketbook?

Philadelphia residents have a new incentive to kick their soda habits and opt for water, which comes in the form of a new tax. Beginning Jan. 1, 2017, the city will impose a tax on sugar-sweetened beverages.

So what constitutes a “sugar-sweetened beverage”?

According to Bill No. 160176, a “sugar-sweetened beverage” is any non-alcoholic beverage or non-alcoholic syrup or concentrate that contains any type of sugar-based sweetener such as sucrose, glucose, or high fructose corn syrup; artificial sugar substitutes such as stevia, aspartame, sucralose, neotame, acesulfame potassium, saccharin, and advantame are also included. This non-comprehensive list of ingredients is likely to include most of the staple soda brands, as well as pre-sweetened coffee or tea, non-100%-fruit juice, sport drinks, flavored water and energy drinks.

The city’s “soda” tax will be $0.015 per fluid ounce. To give you an idea of how much extra a person will be paying when they purchase a sugary drink, in addition to the regular price of a beverage, one 12 ounce drink will cost an additional $0.18; a 12-pack of soda will cost an additional $2.16.

Philadelphia is joining Berkeley, CA as the second city in the country to adopt a soda tax but both cities cited different reasons for the implementation of the tax.

Berkeley’s measure was part of a more health conscious goal of discouraging the consumption of sugary beverages, while Philadelphia’s Director of Finance is interested in the revenue the tax can bring to the city.

Rob Dubow, Director of Finance for the City of Philadelphia, testified in front of the City Council Committee that the tax is needed to support the promotion of “education, safety and economic opportunity” for the city. The particular initiatives the director referred to are pre-K expansion, community schools and rebuilding community infrastructure. The city projects annual revenue from the tax to be approximately $91 million.

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Is a sugar-sweetened beverage tax a fair way to combat health and revenue issues?

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