Themes and quotes extracted from interviews with Philadelphia beverage distributors (pre-tax interviews n = 9; follow-up interviews n = 4) about their experiences with Philadelphia’s Beverage Tax

Theme	Distributors’ quotes
Concerns about the tax purpose, amount, and use of revenue	For instance, we distribute Honest tea and I think there’s like 30 calories in a bottle compared to a Snapple which has 120 calories a bottle but that bottle is going to be taxed the same even though it’s 120 calories so. We are a little bit conflicted about selling soda to begin with, the fact that the tax is going to support early childhood education, we are excited that some money and attention is going there.
Concerns about the tax’s impact on finances and business operations	People are going to leave the area to go buy soda, or to buy iced tea or buy cranberry juice and not pay the tax, either on the outskirts of the city in the state of Pennsylvania or over in Jersey. I have a feeling it may impact, because my drivers are paid salary plus commission, so it may impact their revenue, their paycheck, if we are selling in the city because of the tax is going to affect their bottom line and their paycheck. Financially, it has been a big impact on us, our business. We are losing a lot of inner-city sales is what it boils down to. Dollar-wise we are down close to $1 million. It is more difficult to reset everything as far as the size of the bottles and the formula because we would have to change the formula of the product. We’re waiting to see what’s going to happen. I believe the tax will be collected at the end-user level, so we will not be collecting tax at this level. […] I do expect a reduction in the sales of soda. Well, we stopped the soda production in August 2017. January 1st hit, we implemented the increase – we added four dollars per case wholesale. We were eating the 32 cents per case […] And our sales went right to the basement.
Business strategies implemented to lessen financial burden of the tax	My profit margin is about what the tax is, so if I were not to pass it on, I would have no profit. The retailers are feeling it now. The city levied the tax on the distributors and the distributors are like, well, you know what we’re going to do, we’re going to put it on the retailer, and the retailer’s like you know ‘We’re going to, too,’ then boom boom boom. The little people always get affected.
Perceptions of customer response to the tax based on income	N/A
Confusion around tax implementation	The question that we have is what happens if the dealer doesn’t notify us? She said on the call that if they don’t notify you, just charge them the tax. On the other hand, if they don’t notify you which it specifically says in the ordinance then don’t charge them the tax. It’s just strange. There’s a lot of misinformation out there and stuff that we need to clarify. For example, I could sell soda to Sysco and we are both distributors. So does that mean that I have to pay the tax on the soda and they have to pay it again? Figuring out how to pay the tax and make sure that we are compliant because it is putting in a whole new process that we did not have to do before. We have put out a lot of emails to accounting firms and only one of them has gotten back to us so far. Even though they do sales tax they didn’t want to touch it. … We are a national company and we’re calling up […] big sales tax preparers in the country. We made a price increase in soda across the board, so a soda in Philadelphia and one in Baltimore are the same price. […] It was not really the intent of the law, but we don’t really have a way to send one list to customers in Philadelphia and another to customers outside.