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. Examples of dealers are delis, restaurants and grocery stores, as well as hospitals, schools, nonprofit groups, and others.
If you are a dealer of sweetened beverages in Philadelphia, you need to:
- Buy the products from a registered distributor. Notify your distributor(s) that sweetened beverages sold to you are subject to the tax. Your Pennsylvania Sales Tax exemption certificate indicating your Philadelphia location is a valid notice.
- If you choose not to purchase from a registered distributor, you must become a registered dealer, then file and pay the tax to the City of Philadelphia directly. It is your responsibility to know if your distributor is registered.
- If you purchase products from a distributor who will never be registered (for example, international imports), you must register as a special dealer. File and pay the tax to the City for special products.
If you are a distributor of sweetened beverages sold in Philadelphia, you can:
- Register as a distributor, even if you are located outside Philadelphia. Your business will appear on the list of official registered distributors, which the City shares and disseminates to Philadelphia dealers. You will not become liable for other Philadelphia business taxes just because you register as a distributor, if you don’t otherwise do any business in Philadelphia.
If you become a registered distributor, you must:
- Send your Philadelphia dealers a confirmation that you received their notification about sweetened beverages covered by the tax. A dealer’s Pennsylvania Sales Tax exemption certificate is a valid form of notification to you from a dealer.
- For each transaction, provide a receipt with the amount of sweetened beverages supplied in the transaction and the amount of tax imposed on that transaction. This can appear in an invoice or a supplemental form provided by the City.
What is taxed
The tax covers the distribution of sweetened beverages intended for resale in Philadelphia.
A sweetened beverage refers to more than just soda. It includes any non-alcoholic beverage that lists sugar as an ingredient, or that lists any other sweetener as an ingredient. It does not matter whether the sweetener has calories or no calories; “diet” and “zero calorie” sweeteners are included. If any of the following sweeteners is listed as an ingredient, the distribution of the beverage is subject to the tax: sweeteners with calories, such as sucrose, glucose or high fructose corn syrup; and sweeteners with no calories, such as stevia, aspartame, sucralose, neotame, acesulfame potassium (Ace-K), saccharin, and advantame.
Examples include 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.
Pre-packaged beverages made with “natural” sweeteners, such as agave, honey, or stevia, are also covered by the tax.
The tax also covers any syrups or concentrates that are used to make a beverage, that includes any sweetener as an ingredient. Examples include soda syrup and drink mix powder.
A more complete list of ingredients is in the PBT regulations, however it is not possible to list every ingredient that could be a caloric or non-caloric sweetener.
Philadelphia Beverage Tax filings and payments are due on the 20th of each month, for sales in the prior month. For example, electronic returns and payments for the sale of sweetened beverages during the month of June are due by July 20.
If you are registered to pay the tax, you will need to file a return every month, even if you have no business activity.
Tax rates, penalties, & fees
How much is it?
1.5 cents per ounce of sweetened beverage distributed. While concentrates or syrups are also covered, the tax rate is based on the final beverage produced, not the amount of raw syrup or concentrate.
What happens if you don't pay on time?
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 on the Phila. Tax Services website.
File returns and pay the Philadelphia Beverage Tax electronically through the Phila. Tax Services website. The tax is due the 20th of each month for the prior month.