Tübingen introduced a so-called packaging tax in 2022. Thus, the city taxes disposable packaging as well as disposable utensils and cutlery, which are spent on the sale of food and drinks for consumption on site or outside the home. Tübingen pursues two goals: on the one hand, the packaging tax should save money by reducing waste disposal. On the other hand, the environment should also benefit from the fact that such packaging becomes financially unattractive. Originally, the packaging tax per individual meal should be a maximum of EUR 1.50. However, many affected companies see their existence threatened by this tax. Therefore, the fast food chain McDonald’s sued in the administrative court. The central question was: can Tübingen as a city levy its own tax?

1st Packaging Tax in Tübingen – Introduction

Since 2022, consumers pay a packaging tax on disposable materials if they buy drinks or quick meals of any kind in Tübingen. Tübingen has thus taken a step that is also controversial among many lawyers. Can a city simply collect its own taxes? Quite apart from the fact that the packaging tax in Tübingen may have a significant impact on the economic situation of the approximately 440 companies concerned, this question should finally be clarified in court. This at least found a local franchisee of the fast food chain McDonald’s – and complained.

The multiple consequences of introducing the packaging tax in Tübingen and elsewhere is now the focus of this article.

2. Packaging tax regulations

Before we move on to the clarification of the legal question, let us consider what provisions Tübingen incorporated into its Packaging Tax Statute.

First of all, the packaging tax is a local tax that consumers have to pay. However, the establishments that maintain outlets where food and drink can be purchased for consumption outside the home are considered to be liable for tax. You must submit annual tax returns to the competent tax office. In addition, Tübingen reserves the right to demand quarterly advance payments. These correspond to a quarter of the tax amount incurred in the previous year.

Now to the details: A packaging tax of EUR 0.50 applies to disposable packaging. This applies, for example, to paper and cardboard packaging, disposable beverage cups and pizza boxes. Ice cream cups are also included. However, there is no packaging tax for ice cream wafers and other edible containers. Furthermore, Tübingen uses disposable utensils with a tax of EUR 0.50. Plastic or other disposable plates as well as French fries are affected by this. Thirdly, a packaging tax of EUR 0,20 per disposable cutlery (individual or set). So it comes on French forks as well as on other disposable cutlery. Drinking straws and ice spoons which can only be used once are also included.

Originally, § 4(2) of the Packaging Tax Statute provided for a cap of EUR 1.50 per individual meal. However, this requirement has again disappeared in the current statutes.

In addition, the statutes provide for some exceptions. In any case, there is no packaging tax if a sales outlet withdraws the spent funds and transfers them to recycling. However, this does not mean regular waste disposal. Other measures are therefore necessary for recovery. These must also be verifiable on request.

A further tax exemption applies to events, for example markets and festivals. However, the supply of packaging and other taxable goods is exempt only if the establishments offer a sale of food and drinks at such events for a maximum of ten days per year.

Legal clarification on the legality of the packaging tax

3.1. Legal concerns on the part of the companies concerned

It was probably clear from the outset that the introduction of the packaging tax in Tübingen would not cause enthusiasm among the companies affected by it. As was to be expected, legal resistance arose soon after the introduction of the packaging tax. For example, a franchisee of the fast food chain McDonald’s in Tübingen complained against the introduction of the tax. For understandable reasons, the plaintiff received support from the franchising group. Because if the tax in Tübingen would have been preserved, this would probably have served as a model throughout the Federal Republic. However, if all franchisees in Germany or even Europe were affected by such a packaging tax in the future, this would lead to considerable financial losses up to the level of the franchisor.

Of course, the complaining party has instead put forward a completely different argument, namely that one wants a nationwide uniform solution. However, the greatest economic benefit would be preserved by the entrepreneurs concerned only by a complete ban on such taxes. After all, it is a lot of money. Because the sale of their products under a packaging tax would certainly dampen the turnover. But it was also feared that the introduction of reusable materials as an alternative to the previous offer would lead to a loss in sales. After all, it means considerable effort to build a circular economy with packaging materials, costs that are spared for good reason.

3.2. Legal clarification

3.2.1. Action before the Administrative Court of Mannheim against the Packaging Tax

This is how the lawsuit ended up before the Baden-Württemberg Administrative Court in Mannheim. This actually decided in 2022 that the packaging tax had legal flaws. The judges ruled that by imposing the packaging tax, Tübingen would infringe both Article 105 paragraph 2a sentence 1 GG and applicable federal waste legislation. In particular, the reference to the Basic Law weighed heavily because it accused Tübingen of wanting to impose a tax that was effective across municipal borders. However, cities and municipalities may only determine for their own regional areas of competence.

3.2.2. Revision before the Federal Administrative Court

But Tübingen did not give up. The university city went into revision to deal with the case with the Federal Administrative Court in Leipzig. On 24.05.2023 it came then to the currently valid judgment: Tübingen may collect the packaging tax. The court justified this by saying that the sale of quick meals and other food and drinks sold with tax-charged disposable materials are typically consumed within the city limits. Waste generation would thus remain locally limited. This gives the local meaning over which Tübingen is free to determine within its righteous borders. In addition, the Packaging Tax Statute is in line with both Union and federal waste law, because the purpose of the Packaging Tax also has the prevention of waste as its primary objective.

Only in two aspects did the judges see cause for rebuke. On the one hand, the original ceiling of EUR 1.50 per individual meal was too vague. On the other hand, they also considered the originally intended unlimited right of entry for tax examination to be unlawful. However, both regulations have already been improved in the revised Packaging Tax Statute, so that the city administration of Tübingen has pre-empted the court rulings in this regard.

4. Effects of the Packaging Tax

But what consequences does the ruling of the Federal Administrative Court have in the packaging tax case? The short answer is: many. We begin the long answer by reproducing the opinion of the complaining party.

4.1 Reaction of the plaintiff to the judgment of the Supreme Administrative Court

The plaintiff, who continues to receive support from the McDonald’s group, announced after the verdict that she wanted to wait for the written reasoning. Only then would a decision be made regarding a possible complaint before the Federal Constitutional Court. In the meantime, however, the plaintiff has also taken this step and filed a constitutional complaint with the Federal Constitutional Court. So we can look forward to a show down in Karlsruhe. Until then, however, it should remain in Tübingen under the current regulation.

4.2.Reactions of other municipalities to the Federal Administrative Court’s judgment

Despite the final outcome of this dispute, the introduction of the packaging tax has attracted attention in the municipalities throughout Germany. In fact, many cities and municipalities have already contacted the city administration in Tübingen with requests for the introduction and implementation of such a tax. In addition, many German citizens in their respective municipalities have called for the introduction of a similar tax. The first imitators are Gummersbach in North Rhine-Westphalia and Konstanz am Bodensee. Both cities want to introduce their own equivalents to the Tübingen Packaging Tax in 2024.

4.3. General interest in a nationwide solution

The interest in regulating disposable materials, which are mainly disposed of in public spaces and cause considerable costs in their disposal, is therefore great. However, in view of the pending decision by the Federal Constitutional Court, many municipalities prefer to postpone the introduction of their own regulations. In fact, many of them prefer that a uniform regulation be made by the federal government. After all, there are various risks lurking in a patchwork of things that might otherwise arise, for example in terms of the competitiveness of the entrepreneurs concerned.

The pressure on the legislature to create a nationwide legal basis for introducing a packaging tax has thus increased. Nevertheless, the current legislative initiative to reduce disposable packaging waste does not mention a packaging tax that is both fair and effective. However, looking across national borders shows that a lot is already changing abroad in this regard. In the UK and more recently in Spain, packaging taxes apply. Therefore, it is probably rather a matter of time before there will also be a comprehensive packaging tax in Germany. Because at the latest if the Federal Constitutional Court should confirm the admissibility of the Tübingen packaging tax, many municipalities will follow suit. The question will then simply be whether we would rather have thousands or just one regulation on this.

5th packaging tax – a complex conclusion

5.1 Packaging tax viewed from a historical perspective

The packaging tax in Tübingen is a wake-up call. In fact, there have been similar approaches in the past that pursued the same goal, namely to reduce the flood of packaging waste that plagues large cities in particular. We all know this is a general annoyance. But can cities and municipalities react with their own tax? Regardless of whether a tax is an appropriate measure to achieve this objective, this certainly requires clarification from a legal point of view.

Few will probably remember this, but more than 30 years ago there had already been a comparable tax in about 80 German cities and municipalities. And even then, the introduction of a packaging tax was legally controversial. So they went against the city of Kassel in court and complained about several instances. After years of litigation, however, the Federal Constitutional Court overturned the right of municipalities to collect such taxes in 1998. However, the exact justification is interesting. Because a general ban on the collection of such a tax did not want to pronounce the judges at that time either. Ultimately, it was only a question of whether the then packaging tax of the city of Kassel harmonized with the waste law of the Federal Republic. Only this rejected the judges.

5.2. A plea for the packaging tax

Since then, the situation on our streets and public squares has hardly changed, so that the city of Tübingen made a new attempt in 2021 to master the mountains of garbage. Finally, no regulation had been adopted at federal level until then that was capable of remedying the situation. Presumably, however, political calculation was another factor that led to the introduction of the Tübingen Packaging Tax. In any case, the matter for the city of Tübingen currently looks quite good, because the originally defended legal deficiencies could dispel the Federal Administrative Court probably understandably.

Nevertheless, a uniform solution, if possible equal at EU level, would be the best option to make packaging waste obsolete. After all, there are certainly suitable measures that can be introduced as a substitute for single-use materials. This has also been recognized by Tübingen from the beginning. That is why the city, in parallel with the packaging tax, promotes reusable alternatives. But even if these proposed solutions are less convenient or more expensive than the traditional materials and measures, they must always be justified by comparing littered and clean, cheaper cleaned urban areas. Ultimately, however, it is also a question of justice. It is certainly fairer than before if the costs of waste disposal are borne by the polluter pays principle rather than by the general public.