Sugary-drinks tax passes legal muster in Pennsylvania
A panel of judges in Pittsburgh has ruled that Philadelphia's 1.5-cent per fluid ounce tax on sugar-sweetened beverages is valid and not duplicative of the general retail sales tax. And, since the tax is paid by distributors and not consumers, it does not violate federal law prohibiting taxes on retail transactions conducted with food stamps, the court ruled.
Just the day before the ruling was issued, the AMA House of Delegates adopted policy to "encourage state and local medical societies to support the adoption of state and local excise taxes on sugar-sweetened beverages with the investment of the resulting revenue in public health programs to combat obesity."
The AMA Litigation Center filed an amicus brief in the case in support of the Philadelphia ordinance. The Litigation Center was joined by several other organizations, including the American Heart Association, the American Cancer Society Cancer Action Network, the Pennsylvania Medical Society and the Philadelphia County Medical Society.
The tax was enacted in June 2016. Last September, a coalition of retailers and retail groups filed an injunction to block it. And on Dec. 19, 2016, a local court denied the injunction and cited long-standing precedent addressing the duplicative tax issue.
The case was then heard by a seven-judge panel in commonwealth court, a branch of the Pennsylvania appellate court system which mostly hears cases involving state and local governments and regulatory agencies.
That was where the AMA and the other organizations joined the case. And the long-ago established precedents were cited in their amicus brief.
"These taxes are a well-established tool of local and federal governments alike; they are just new to soda," the brief stated, citing the efforts of Alexander Hamilton, the nation's first treasury secretary. Hamilton used fiscal and health justifications for imposing a tax on whiskey in 1791.
In the 5–2 majority opinion upholding the tax, Judge Michael Wojcik cited other precedents involving overlapping state and local laws concerning the regulation of alcohol, anthracite coal strip mining and the hunting of game.
"It shows that these taxes are likely to be upheld and it is within the powers of local governments to impose these types of taxes," said attorney Rachel Bloomekatz, co-author of the amicus brief and a principal at the Gupta Wessler law firm in Washington. "There is certainly historical precedent for using taxes to promote public good and public health."
Read more at AMA Wire.
