Pennsylvania
Oh, La La! Pennsylvania Court Rules Perrier Is A Soft Drink—And Taxable
Perrier water
getty
Sales tax on food and beverages can be complicated. While five states do not have a sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon), the rules in states that do impose a sales tax can vary. Sometimes, all it takes is an add-on or leaving the premises to cause an item to go from nontaxable to taxable (and vice versa). In a recent Pennsylvania sales tax case, the question came down to carbonation.
Facts
On June 1, 2019, Jennifer Montgomery purchased a single 16-ounce bottle of Perrier from Sheetz.
(For the uninitiated, Sheetz is a chain of convenience stores—most of which also sell gas—owned by the Sheetz family. What started as a one-store operation in western Pennsylvania in the 1950s is now a 700+ store enterprise in several states. Importantly, as a resident of eastern Pennsylvania, it’s incumbent upon me to mention that, for decades, a Sheetz vs. Wawa debate has raged in the Keystone State. That question wasn’t resolved in this court action but has been resolved for many in the court of public opinion.)
On June 14, 2019, Montgomery purchased another bottle of Perrier from Sheetz. Sheetz collected and remitted a total of 24 cents in sales tax each time. Afterward, Montgomery filed refund petitions with the Pennsylvania Department of Revenue Board of Appeals (Department) seeking a refund of sales tax based upon her belief that Perrier is natural mineral water and not subject to sales tax in the Commonwealth.
(Montgomery also initiated a class action complaint against Sheetz in the Court of Common Pleas of Allegheny County, alleging the same. The class action was stayed pending the Department’s decision.)
On October 31, 2019, the Department issued a decision and order denying Montgomery’s refund petitions. The Department concluded that Perrier is carbonated water and subject to sales tax.
Montgomery appealed the decision to the Board, which affirmed the denial of the refund petitions on a different basis.
Law & Guidance
Under Pennsylvania tax law, a six percent sales tax is imposed at retail of tangible personal property.
The tax law also excludes “the sale at retail or use of water” (as a public policy note, water is considered a necessity). The exclusion does not apply to soft drinks. Soft drinks are defined as “[a]ll nonalcoholic beverages, whether carbonated or not, such as soda water, ginger ale, coca cola, lime cola, Pepsi cola, Dr. Pepper, fruit juice when plain or carbonated water, flavoring or syrup is added, carbonated water, orangeade, lemonade, root beer or any and all preparations, commonly referred to as ‘soft drinks.’”
The Department also issues informal guidance, such as statements of policy. One of those statements focused on the taxation on the sale and preparation of food and beverages provides that a soft drink is a “nonalcoholic beverage, in either powder or liquid form, whether or not carbonated, such as soda water, ginger ale, colas, root beer, flavored water, artificially carbonated water, orangeade, lemonade, juice drinks containing less than 25% by volume of natural fruit or vegetable juices, and similar drinks. The term does not include fruit and vegetable juices containing at least 25% by volume of natural fruit or vegetable juice. The term does not include coffee, coffee substitutes, tea, cocoa and milk or non-carbonated drinks made from milk derivatives.”
The guidance also makes clear that soft drinks are subject to sales tax.
Montgomery’s Argument
Montgomery argued that Perrier is excluded from sales tax because it is natural mineral water. She claimed that other guidance, including the statement of policy, is unambiguous that water, including natural mineral water, is not subject to sales tax. She argues that “there is no dispute that Perrier is a sparkling natural mineral water.”
She also claimed that the Department’s informal guidance clarifies that all non-flavored mineral water is exempt from tax and does not distinguish between carbonated and non-carbonated mineral water. She claims that it is well settled that the exclusionary provision must be construed against the Commonwealth and in favor of the taxpayer. That would mean, she argued, that Perrier is sparkling natural mineral water, not carbonated water, and is excluded from sales tax.
Montgomery also argued that Perrier does not qualify for sales tax as a soft drink because it is not artificially carbonated. Noting that the definition in the statement of policy includes “artificially carbonated water,” Montgomery urged the Court to conclude that Perrier contains natural carbonation and is exempt from tax.
Commonwealth’s Arguments
The Commonwealth argued that Perrier is not exempt from tax as water, but is carbonated water. That means, they said, that it falls squarely within the definition of soft drink and is subject to sales tax.
The term “carbonate” means “to combine or infuse with carbon dioxide.” The Commonwealth maintained that Perrier is carbonated water because it is manufactured by combining a specific amount of filtered or scrubbed carbonic gas with still water in an industrial plant setting. The Commonwealth further argued that the process used to carbonate Perrier is the same process used to carbonate Coca-Cola
Coca-Cola
Finally, the Commonwealth alleged that because Montgomery didn’t have statutory support for her argument, she improperly relied on the statement of policy and other sources—none of which, they claim, supports a finding that Perrier is exempt from tax. The statutory language makes no qualifications for naturally or artificially carbonated water. Instead, the tax laws simply provide that carbonated water, whether naturally or artificially carbonated, is subject to sales tax. That means, the Commonwealth says, even if the Court concludes that Perrier is “naturally carbonated water,” it is still not exempt under the plain language of the law.
Discussion
Judge Wolf says the arguments “bubble down to one question”—whether Perrier is water and exempt from sales tax.
The Court agrees that the tax law unambiguously exempts the sale at retail of water from sales tax. However, the Court disagreed that Perrier qualifies as water.
The Court then offered a science—and geography lesson—of its own, finding:
- Perrier is sourced from non-flavored mineral water.
- Perrier comes from underground natural springs near the village of Vergeze in Provence, France.
- The water in the natural springs from which Perrier is collected is naturally carbonated.
- Perrier’s carbonic gas and water are independently harvested from different depths within the same geologic formation.
- The carbonic gas and water in Perrier, collected from natural springs, are combined at the bottling plant.
- Before the combination, the water in Perrier is chilled, all of the air is removed (a process called deaeration,) and any carbonation is stripped out.
- Before carbonation, filters or scrubbers remove natural elements and impurities in the carbonic gas and ensure a consistent carbonation level.
- Similarly, before the combination, impurities are removed from the water.
- The water then goes through one of two processes—either a carbonated tank or an in-line carbonation process—where carbonic gas is added to the water and the carbonation levels are adjusted to reach the desired amount for the product.
- The processes used are the same as those for making soft drinks like Coca-Cola and Pepsi. There is no alternative process for carbonating beverages.
- Following these processes, the product is bottled for sale.
VERGEZE, FRANCE – OCTOBER 27: Perrier bottles move down the automated bottling line at the Perrier factory October 27, 2004 in Vergeze, France. (Photo by Gilles Mingasson/Getty Images)
Getty Images
The Court found that when a consumer purchases a bottle of Perrier, the non-flavored mineral water has carbonation.
A finding that mineral water with carbonation is not carbonated water “flies directly in the face of the plain language of the Code,” which treats water and carbonated water differently for sales tax purposes. Perrier, they ruled, is carbonated water as a matter of law and is subject to sales tax as a soft drink.
The Court also rejects Montgomery’s argument that only artificially carbonated water may be taxed as a soft drink. The definition of soft drink in the Code does not contain any natural or artificial qualifications, so Judge Wolf wrote that the argument “does not hold water in the face of the clear and unambiguous statutory language.”
Conclusion
This sort of analysis is often necessary to parse complicated sales tax laws. The taxability (or not) can often turn on something as simple as it did here: bubbles.
In this case, the Court concluded that Perrier is carbonated water and subject to sales taxation as a soft drink. So, drink up, Pennsylvania—just be prepared to pay tax if you’re craving a Perrier.
(Don’t you feel smarter already?)
The case is Jennifer Montgomery v. Commonwealth of Pennsylvania (No. 336 F.R. 2020).
Pennsylvania hides some of its best sights in salt-mining canal towns, riverside boroughs of a few hundred people, and overlooks where the Susquehanna unspools below you. These nine small towns trade crowds for character: a 65-mile rail trail tracing the “Pennsylvania Grand Canyon,” gas lamps flickering over a downtown that still has a family-owned department store, a lake that once held an amusement park and now holds stocked trout every spring. From the Endless Mountains of Bradford County to the Allegheny valleys, here are seven Pennsylvania towns worth the detour.
Harveys Lake
Harveys Lake is a small but approachable borough near the Back Mountain Region of Luzerne County, inviting those who seek outdoor recreation opportunities like boating, fishing, and biking. With a population of just under 3,000, this out-of-the-way town is named for the beautiful lake it surrounds. Harveys Lake was a bustling tourist destination throughout the 20th century. At one point it featured a casino, an amusement park, and Grand Hotel Oneonta. Nowadays, this modest town on a mighty lake is a lesser-known setting for outdoor recreation enthusiasts and those seeking to get away from the usual crowded vacation spots.
Boating is popular amongst locals and visitors alike, and personal vessels can be launched from the Pennsylvania Fish and Boat Commission access on Lakeside Drive. The best way to fish on Harveys Lake is by boat, and there’s plenty of trout stocked in the springtime by the PFBC. It’s even possible to charter a fishing trip on the lake with a guide like Dry Creek Charters or rent a boat for fishing from Harveys Lake Pontoon Cruises. Purchase a guest pass at one of the beaches, like the one at Sunset Beach Club, and unwind with a swim along the lake’s shoreline. The slow pace of life in this town lends itself well to biking, too. The Harveys Lake Loop that runs through the borough is an easy, paved ride around the lake’s perimeter.
Saltsburg
About 36 miles from Pittsburgh is a remote borough sitting where the Conemaugh River and Loyalhanna Creek come together, creating the Kiskiminetas River. This location, combined with its history as a salt mining town, makes it an engaging yet secluded area to explore. The historic Pennsylvania Mainline Canal ran through Saltsburg, and people can still visit and learn about the canal whose terminus was all the way in Philadelphia. The yearly Saltsburg Canal Days Festival every June is an ode to the canal history for residents and visitors interested in food, live music, and even a charity duck race.
It’s easy to find roads less traveled along Saltsburg’s hiking and biking trails, like the Westmoreland Heritage Trail or the Conemaugh River section of the West Penn Trail. When the river is calling, it’s easy to rent a kayak from Saltsburg Kayak and Canoe on Market Street for a leisurely float. Time is well-spent at the Rebecca B. Hadden Stone House Museum viewing historical artifacts and furnishings.
Hollidaysburg
Hollidaysburg is a beautiful small borough in Blair County, PA. With a population of around 5,600, the borough is small enough to be a calm getaway while still serving peak entertainment, views, and outdoor fun. History and recreation collide at Canal Basin Park, where historic markers and a canal lock replica invite onlookers to interact with the community’s past. The Anne Sloane Borland Performing Arts Pavillion provides live music throughout the summer months. View a quiet, breathtaking aerial of the borough from Chimney Rocks Park. The way up to the overlook via the Chimney Rocks Lookout Trail is a great way to take in the natural landscape.
The scenic views continue on old State Route 22, where gorgeous flowers are planted and maintained by the borough at Gateway Garden. Small-town hospitality is abundant at The Dream Restaurant on Allegheny Street, feeding nostalgia with home-style comfort meals. The living history of Hollidaysburg surrounds guests at the Allegheny Street Bed and Breakfast who choose to go out and explore the historic district.
Wyalusing
Wyalusing is a borough best known for the Wyalusing Rocks Overlook, a natural rock formation that offers grand panoramas of the Susquehanna River. The borough is a treat for visitors to the Endless Mountains Region of Bradford County. Wyalusing was originally settled by several groups of Indigenous tribes, such as the Susquehannock, the Iroquois, and the Delaware, before becoming a vital hub for logging and farming. Today, Wyalusing is home to 613 residents who cherish and appreciate their small town.
Spaces like Wyalusing Creekside Park are a phenomenal way to savor the scenery and participate in activities like disc golf and trail walking. The babbling Wyalusing Creek is sure to offer opportunities to catch smallmouth bass. The rich narratives of the borough and surrounding area are highlighted at the Wyalusing Valley Museum. Their location on Main Street makes it easy to book a private tour and browse items in the archive.
Curwensville
The valleys of the Allegheny Mountains are the place to find off-the-grid destinations. Curwensville is a town among them that offers adventure and outdoor fun. Like many municipalities in Western Pennsylvania, the area established itself through the extensive logging industry. The flow of the West Branch of the Susquehanna River nearby made this possible. Now, Curwensville is a valuable riverside town with lots of potential for exploration.
The most popular attraction is Curwensville Lake. Formed by the Curwensville Dam, folks can swim, boat, and fish throughout the spring and summer months. The ever-popular Irvin Park offers a kayak launch area, inclusive playground, and pavilion rentals all season. It’s also the location of the Curwensville Days Festival, a five-day event full of vendors, exhibits, and even a car show. Another annual happening is the Curwensville Blueberry Festival, which includes vendors and a farmers market. Outside of festival season, locals love to satisfy their sweet tooth at the Blue Kow on Susquehanna Avenue.
Shickshinny
Named for the Shickshinny Creek that runs through the center of town, this borough is located between Berwick and Nanticoke in Luzerne County. The Historical and Preservation Society of the Greater Shickshinny Area helps its 715 residents remain active participants in maintaining its regional legacy. They’ve operated an informative historical museum in their building on Main Street that’s available by appointment and during scheduled open houses.
The yearly Shickshinny Borough Carnival is a delightful blend of food, vendors, and live music the town looks forward to in North Canal Park. Parks and recreation go off the beaten path on winding trails like the Mocanaqua Loop Trail or the Susquehanna Warrior Trail. Shickshinny has truly stunning natural formations. Little Shickshinny Falls is arguably the most beautiful. It’s only about 15 minutes’ hike up from the trail on Shickshinny Valley Road.
Wellsboro
The Tioga County seat of Wellsboro is visually stunning, with its most prolific landmark being the Pennsylvania Grand Canyon. This six-million-year-old artifact of nature is part of Tioga State Forest. Many find their way to the canyon from the Pine Creek Rail Trail, which traverses 65 miles through Tioga and Lycoming Counties, respectively. It offers a low-grade path that lends itself well to hiking, biking, and even horseback riding in some sections.
The allure of gas lamps lining the streets downtown gives Wellsboro an almost magical feel. This feeling is amplified by the many shops in the borough, with Dunham’s being one of the last family-owned and operated department stores in the nation. A statue of one of the borough’s founders, Mary Wells Morris, is a welcome and graceful presence on Main Street. Just a few blocks down, the Gmeiner Art and Cultural Center is an inviting space to appreciate more local art at one of its many planned exhibits.
Off the Beaten Path
When the natural beauty of Pennsylvania meets the amiable small towns of the various regions, it creates an incomparable experience. Chartering a boat to fish Harveys Lake is one example of that immersive energy. It’s celebrated in festivities like the Shickshinny Borough Carnival or the Canal Days Festival. At the end of the day, these off-the-grid areas have just as much excitement as their more populated counterparts in terms of atmosphere and offerings.
LEBANON COUNTY, Pa. (WHP) — Cherries, strawberries, peaches — normally all easy to find at local farms this time of the year — but some orchards are still feeling the impact of a freeze that killed many of those fruits.
What’s normally a busy season is a quiet one for the Honey Bear Orchard after an April freeze took all their fruit crops for this year.
PREVIOUS COVERAGE | ‘It just froze them’: Honey Bear Orchards loses $200K, fruit crops in April freeze
“We usually start Father’s Day with sweet cherries … and that day, it has just grown into a big day for us,” owner Nelson Heagy said. “Sometimes, the cars are lined up the whole way in the lane, 3 to 400 cars come in that day. Tomorrow it’s going to be quiet.”
The night of April 20, temperatures in Lebanon County dropped below 24 degrees — a devastating blow to farms whose fruit trees were unable to survive the cold temperatures.
In less than 24 hours, Honey Bear Orchards lost dozens of acres of fruit, including cherries, apricots, apples and peaches.
At the time, the orchard estimated it lost around $200,000, but Heagy says that’s not the worst part.
“It’s more the emotional, because financially, yes, we’re geared up for that and it’s meeting the people.”
After Gov. Josh Shapiro called on the USDA to help out Pennsylvania counties impacted by this freeze, the agency announced several counties were eligible for disaster assistance in the form of emergency loans.
READ MORE | Six PA counties included in disaster designation for farmers affected by April freeze
Adams, Chester, Franklin, Fulton, Lancaster and York counties are included.
Absent from that list is Lebanon County, where Honey Bear Orchards is located.
We reached out to the USDA to ask why Lebanon County wasn’t included, but we haven’t heard back yet.
However, Heagy says it’s likely because there’s only two orchards in the county.
“A lot of people reached out and said, ‘What can we do?’” he said. “And it’s simply come back next year.”
They’re not the only farm that has to make do this season — Forge Hill Orchards in York County lost half of its crop in the April freeze.
Despite that, retail manager Abby Naylor says they’re lucky because they still have a little bit of everything.
“I think the best thing that people can do is just to buy local and help support the farmers that really lost a lot of their stuff.”
The Pennsylvania Beef Council recently launched the inaugural Pennsylvania Beef Trail with menu tastings at two highlighted trail stops in Berks County.
Held in May to celebrate Beef Month, the event brought together Pennsylvania Beef Council leadership, Pennsylvania Secretary of Agriculture Russell Redding, local restaurant partners, beef producers and community members to celebrate Pennsylvania beef, local food businesses and the culinary creativity found across the Commonwealth.
The Pennsylvania Beef Trail highlights restaurants across the state serving standout beef dishes nominated by consumers. Hosted on the Pennsylvania Beef Council website, the trail features an interactive map designed to help Pennsylvanians discover delicious beef dishes by region and plan their own beef-inspired dining experiences.
“The PA Beef Trail is a celebration of everything that makes Pennsylvania beef special: the farmers who raise it, the restaurants that prepare it and the consumers who love it,” Nichole Hockenberry, executive director of the Pennsylvania Beef Council, said in the release.
“Launching the trail during May, which is Beef Month, gave us the perfect opportunity to showcase the connection between agriculture, local businesses, and the meals that bring people together.”
The celebration featured two stops on the trail: Saucony Creek Brewing Company in Kutztown and Deitsch Eck Restaurant in Lenhartsville.
Attendees sampled a variety of featured beef dishes, including pit beef sliders, sausage sandwiches, smoked chuck roast tacos, and Golden Arches flatbread from Saucony Creek Brewing Company, as well as beef pot pie, shepherd’s pie, and The Luther from Deitsch Eck Restaurant.
The launch event also underscored the role of beef in Pennsylvania’s agricultural identity and local economy. By highlighting restaurants that serve creative, consumer-loved beef dishes, the trail encourages residents and visitors to support local businesses while recognizing the farmers and producers behind every plate.
“Pennsylvania beef has a story that stretches from pasture to plate,” Kylie Lusk, director of consumer affairs for the Pennsylvania Beef Council, said in the release. “The PA Beef Trail gives consumers a fun, interactive way to explore that story while discovering restaurants and dishes they may not have tried before. We’re excited to see people use the trail throughout the year to support local restaurants and celebrate beef across the Commonwealth.”
The inaugural PA Beef Trail features 73 stops across Pennsylvania, showcasing a wide variety of dishes, from burgers and brisket to short rib, oxtail ragu and other creative beef-forward menu items. Organized by region, the trail makes it easy for consumers to find nearby stops or plan a road trip around Pennsylvania’s beef destinations.
The Pennsylvania Beef Council encourages consumers to explore the trail, visit participating restaurants, and share their experiences on social media.
To view the interactive map and explore the full PA Beef Trail, visit www.pabeef.org/pa-beef-trail.
-
San Francisco, CA9 minutes agoMLB Rumors: Latest Intel on Potential Matt Chapman Trade for San Francisco Giants
-
Dallas, TX11 minutes agoDallas’ Fair Park to Get $2.5M Boost From McKesson – Dallas Weekly
-
Miami, FL17 minutes agoAir quality alert in effect in Miami-Dade and Broward counties: National Weather Service
-
Boston, MA24 minutes agoBoston Signs Big Blueliner Rylind MacKinnon To One-Year Extension
-
Denver, CO27 minutes agoFire destroys home under construction in northwest Denver
-
Seattle, WA32 minutes agoWe can stop pretending that a suburban stadium would be better for soccer in Seattle
-
San Diego, CA39 minutes agoNASCAR Cup San Diego starting lineup: Shane van Gisbergen rockets to pole
-
Milwaukee, WI42 minutes agoBrewers’ No. 6 prospect gives glowing review of Milwaukee’s farm system
