City Looks in Other Pocket, Says Soda Tax Revenue Is Actually $5.7 Million
In its first month, Philadelphia’s beverage tax has brought in $5.7 million, according to information released by the city’s revenue department on Thursday.
The figure more than doubles the city’s $2.3 million prediction for January, and officials expect the preliminary figure to increase once all tax payments have been processed. The current revenue collection for January still falls short of the $7.6 million monthly average the city must collect to meet its $91 million-a-year goal.
“The budget office’s projection of $2.3 million was intentionally conservative because this is a new tax, and it was difficult to determine the extent, if any, of issues that taxpayers would have in filing for the first month,” city spokesperson Mike Dunn told Philadelphia magazine.
The city said it expected a slow start to tax collections this year because many businesses were slow to register, file, and pay the tax and relied on selling off their pre-tax inventory of surgery beverages. Even so, the city says it is on track to meet its projected $46 million by June 30th, the end of fiscal year 2017. Dunn says January’s collection is “a result of the hard work of the staff in the revenue department that compliance issues have been minimal.”
The revenue department has launched an investigative monitoring campaign to enforce compliance with the tax that includes auditor visits to dealers and distributor locations and an effort to clarify for businesses their responsibilities under the new law. “The monitoring protocol isn’t about punishing business,” said revenue commissioner Frank Breslin in a statement. “It’s about helping make sure everyone is doing what they are required to do so everyone can avoid penalties and, ultimately, so we can fuel bigger and better things for the people of Philadelphia.”
Some businesses have already reported beverage sales drops as high as 50 percent and layoffs due to slow operations. The city plans to use the revenue from the beverage tax to fund pre-K expansion, community schools, and the mayor’s “Rebuild” campaign to revitalize public spaces.
Dunn says final revenue figures for January won’t be available until mid- to late March.
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