In a recent decision by the Commonwealth Court of Pennsylvania, taxpayer Jennifer Montgomery’s petition for a refund of sales tax paid on Perrier non-flavored mineral water was denied. The case, Montgomery v. Commonwealth of Pennsylvania, revolved around the classification of Perrier as a “soft drink” under Pennsylvania’s Tax Reform Code of 1971. Montgomery had argued that Perrier, being natural mineral water, should be exempt from sales tax.
The Court, however, upheld the decision of the Board of Finance and Revenue, which concluded that Perrier is carbonated water and, therefore, falls within the definition of “soft drink” as per Section 201(a) of the Tax Reform Code. This section includes carbonated water in the taxable category, making Perrier subject to sales tax under Sections 202 and 204 of the Code.
Montgomery’s argument was based on the interpretation that all-natural mineral water, whether carbonated or not, should be exempt from sales tax, referencing the Department’s informal guidance documents. Despite her contention, the Court affirmed that the statutory definition prevails, categorizing Perrier as a taxable soft drink due to its carbonation. This ruling highlights the importance of statutory definitions in tax law and clarifies the tax status of carbonated mineral waters in Pennsylvania. (Montgomery v. Commonwealth of Pennsylvania, Commonwealth Court of Pennsylvania, No. 336 F.R. 2020, April 23, 2024)