NFIB Legal Center files "friend of the court" brief
Since the City of Philadelphia imposed the so-called “soda tax” there have been numerous news reports that small grocers, convenience stores, and other businesses selling soda, tea, and other beverages within city limits have lost considerable business. A study done in December of the Philadelphia Beverage Tax found “bottlers’ sales in Philadelphia fell by roughly 29 percent while increasing by roughly 26 percent in the region immediately surrounding the city.” That strongly suggests that consumers are traveling outside the city to avoid the tax. It also found, “same-store supermarket beverage sales in Philadelphia fell by 24 percent between early 2016 and 2017, while those outside Philadelphia increased by 14 percent.”
This week NFIB’s Legal Center filed an amicus brief on behalf of six Pennsylvania business groups in the Pennsylvania Supreme Court, arguing that the Philadelphia Beverage Tax is prohibited by state law. This “friend of the court” brief argues the state law disallows local taxation on the same retail item and transaction that is already subject to state sales tax. The amicus brief argues that the lower court decision violates legislative intent and improperly results in double-taxation.
The legal filing suggests that if Philadelphia’s Beverage Tax is not overturned, other municipalities may follow Philadelphia’s lead. Such a decision would create a loophole for local governments, leading to a “crazy quilt” of taxes across the state, and making it difficult for businesses to operate. Indeed, financially struggling municipalities might impose taxes on any retail item to cover deficits. Smaller businesses would especially be harmed when subjected to an uneven playing field, as has already been witnessed in Philadelphia.
The business groups filing the amicus brief include the National Federation of Independent Business, the Pennsylvania Chamber of Business and Industry, the Pennsylvania Restaurant and Lodging Association, the Pennsylvania Retailers’ Association, The National Association of Theatre Owners, and the Tri-State Automatic Merchandising Council.
