per ounce of sweetened beverage
Who pays the tax
Distributors of sweetened beverages. A distributor is any person who sells sweetened beverages to a dealer. A dealer is any person who sells sweetened beverages at retail, for example, delis, restaurants, or grocery stores.
If you are a dealer of sweetened beverages, you need to do two things:
- Buy the products from a registered distributor. If you do not purchase from a registered distributor, you will have to register and pay the tax directly to the City of Philadelphia.
- Notify the distributor that Sweetened Beverages sold to you are subject to the tax. Even if your distributor is outside of Philadelphia, they still must file to become a registered distributor with the City. If you do not purchase from a registered distributor and notify them that they must pay the tax on products they sell to you, you are subject to the tax if you sell sweetened beverages in Philadelphia.
What is taxed
The tax is not just on sodas. This tax is on any non-alcoholic beverage, syrup, or other concentrate used to prepare a beverage that lists as an ingredient any form of caloric sugar-based sweetener, including, but not limited to sucrose, glucose, or high fructose corn syrup.
Drinks considered “diet” or “zero calorie” are also taxed. Specifically, this tax is on any non-alcoholic beverage, syrup or other concentrate used to prepare a beverage that lists any form of artificial sugar substitute, including stevia, aspartame, sucralose, neotame, acesulfame potassium (Ace-K), saccharin, and advantame.
Examples of sweetened beverages
Soda (regular and diet); non-100%-fruit drinks; sports drinks; sweetened water; energy drinks; pre-sweetened coffee or tea; and non-alcoholic beverages intended to be mixed into an alcoholic drink.
Starting January 1, 2017, the City of Philadelphia will impose a 1.5 cents per ounce tax on the supply of sweetened beverages to retail dealers (example: regular and diet sodas, teas). The tax is also levied on syrups and concentrates used to make sweetened drinks.
The tax will be due the 20th of each month for the prior month. The first payment will be due February 20, 2017, for distribution activity in January 2017.
A hearing on the proposed Philadelphia Beverage Tax regulations was held on Thursday, October 13, 2016. Final regulations and the Revenue Commissioner’s Report were filed with the Department of Records on October 31, 2016.
Tax rates, penalties, & fees
How much is it?
1.5 cents per ounce of sweetened beverages. While concentrates or syrups are also taxed, their tax rate is based on the final beverage produced, not the raw syrup or concentrate.
What happens if you don't pay on time?
A taxpayer who does not purchase from a registered distributor is responsible for the tax. If you don’t pay on time, interest and penalties will be added to the amount you owe.
For more information about rates, see our Interest, penalties, and fees page.
If you cannot pay your Beverage Tax, please contact the Philadelphia Department of Revenue to discuss entering into a payment agreement.
Additional penalties of $1,000 may be imposed for non-compliance and your Commercial Activity License can be revoked.
How to pay
All taxpayers should register online at PhillyBevTax.com.
The first filing and payment is due February 20, 2017, for activity in January 2017. You will file returns and pay the Philadelphia Beverage Tax electronically through PhillyBevTax.com.