Philadelphia's sweetened beverage tax, the first of its kind ever to be enacted in the nation, has been upheld by the Commonwealth Court amid the tax's projected revenue shortfall.

The court rejected the arguments of several retailers and beverage distributors, as well as the American Beverage Association, that the tax wasn't simply a levy on sweetened drinks, but instead a “power grab” by the city that could undermine businesses and overlapped with the already existing state sales tax.

Both sides' arguments in the case centered on the point at which drinks would be taxed—with distributors saying it's a sales tax and attorneys for the city government insisting it's paid directly by distributors, not at the cash register.