January is typically the season for catching up on — or freaking out about — bills. But it's also the season of new taxes, and shoppers in Philadelphia in particular are learning that their budget woes may have just begun...
NPR reported last June when the law passed in the Philadelphia City Council, 13-4:
The new tax, which amounts to 1.5 cents per ounce, “will hit thousands of products, essentially anything bottled, canned or from a fountain with either sugar or artificial sweetener added, save for a few exceptions,” as Philly.com reported.
The law lists these as examples of taxable products: “non-100%-fruit drinks; flavored water; energy drinks; pre-sweetened coffee or tea; and non-alcoholic beverages intended to be mixed into an alcoholic drink.”
The exceptions include baby formula and products that are more than 50 percent milk, fruit or vegetable juice, according to the law. It is set to go into effect on Jan. 1, 2017.
But now that the tax has become reality, consumers are sharing their sticker shock online. Some simply posted photos of the new price tags:
Vending machines are not exempt either:
Lawmakers were initially hoping that their tax would be hidden by increased prices from retailers, as evidenced by the way that the City Council explained the application of the tax to Philly.com:
“The tax will be levied on distributors. Only time will tell how much will trickle down to consumers. But all in, it could add up to 18 cents to the cost of a 12-ounce can, $1 to the cost of a 2-liter container, and $2.16 to the cost of a 12-pack.”
As it turns out, the “trickle down” is pretty much immediate.
And lawmakers may be disappointed to see that retailers are making sure that their customers know why they're paying more: many stores are clearly denoting the amount attributed to the tax on their receipts. And shoppers are taking notice:
With sports drinks included in the list of taxable items, student athletes may also feel the burn of this particular tax. Parents who used to be able to supply an entire soccer team with Gatorade will be forced to spend, in some cases, almost double what they did just last year.
The tax was justified by the council as a benefit for kids, as reported by NPR:
Mayor Jim Kenney supported the tax. After the law passed, he called it “a historic investment in our neighborhoods and our education system.”
As NPR's Allison Aubrey has reported, “One of the mayor's selling points in persuading the City Council to support the measure is that much of the estimated $91 million the tax would bring to the city's coffers each year would boost funding for programs including citywide pre-K education.”
But their plan may have backfired, at least for now, as city residents are driving to the suburbs in order to purchase beverages that are taxable just miles (sometimes even yards) away within the city limits. The Delaware Valley News reported:
People from outside the city came in, loaded shopping carts, and then came in for seconds, to beat the limit imposed by the store. These were not locals. One man from Kensington came in and purchased no less than $50.00 worth of soft drinks. His name was Dave.
“I work too hard to give my money away to other people. Kenney, that idiot is done. I am not voting for him or any moron on city council that let this pass.”
But even those who choose to leave the city to avoid the beverage tax will be feeling it in their wallets — the state of Pennsylvania has imposed an $0.08-per-gallon gas tax that also took effect on January 1, 2017.