Letters: Beverage tax's Achilles' heel

MANY have debated the mayor's proposed sugar-sweetened beverage tax, but it would be illegal.

Pennsylvania law specifically bans the city from taxing an item that the state already taxes. As anyone who's picked up a six-pack of soda in a supermarket knows, Pennsylvania taxes ALL soft drinks at 6 percent, sugar sweetened or not. Like the state sales tax, the proposed sugar tax would fall on the consumer. If this tax were enacted, we'd pay separate taxes on the same item.

In fact, the city designed this tax to fall on the consumer, claiming the goal is to change buying behavior. Although the drafters labeled the tax as one on the "privilege of selling" sugar-sweetened drinks, it's unlikely that the courts will be distracted by clever drafting.

Most experts agree that taxing the "selling" of items and then the "buying" is essentially taxing the same thing. As the Supreme Court famously stated: A tax on sleeping measured by the number of shoes in your closet is a tax on shoes.

This is not the first time that the city has violated the state pre-emption rule. Several decades ago, the first version of the "liquor by the drink law" was thrown out by the state Supreme Court because it was pre-empted by two state taxes: the sales and use tax and liquor tax, both of which are imposed on liquor farther up the distribution chain.

The court held that the intent and practical effect of the state taxes was to burden the consumer, and since Philadelphia's tax also burdened the consumer, it was invalid. As a longtime student and writer about Pennsylvania tax law, I fully expect that courts will draw the same conclusion in the case of the beverage tax.

Pennsylvania has authorized and laid out in detail how Philadelphia can impose a business-privilege tax. Having done so, the courts will likely conclude that Philadelphia cannot impose a second business-privilege tax paid only by vendors of sugar-sweetened beverages.

Joseph C. Bright

Philadelphia