Gov. Tom Wolf: Billions in revenue from proposed sales tax
March 18, 2015 10:49 PM
Matt Rourke/Associated Press
Gov. Tom Wolf delivers his budget address March 3 in Harrisburg.
By Karen Langley / Post-Gazette Harrisburg Bureau
HARRISBURG — The Wolf administration on Wednesday released projections of how much revenue Pennsylvania would bring in by taxing various categories of goods and services — from candy to non-prescription drugs to cable television — through an expanded sales tax.
Gov. Tom Wolf’s budget proposal, which is the subject of ongoing hearings before the House and Senate appropriations committees, would increase the rates of both the sales and personal income taxes, while cutting corporate net income taxes and providing homeowners with relief from school property taxes.
Applying a proposed 6.6 percent sales tax — an increase from the current statewide rate of 6 percent — to a host of new purchases would bring Pennsylvania about $1.16 billion in the fiscal year beginning July 1 and $2.97 billion in the following year, according to the Department of Revenue.
Mr. Wolf has proposed changing the rate and expanding the list of taxable purchases on Jan. 1, 2016, halfway through the state’s fiscal year.
The categories projected to bring the most money into the state coffers include cable television, at $106 million next year and $260 million the following, and higher education meal plans and other non-tuition fees, at $102 million next year and $120 million the following.
New taxes on amusement and recreation industries, a category that includes fitness centers and golf courses, are projected to bring the state $94 million next year and $258 million the following.
Taxing social assistance, which includes child care, would bring in $72 million next year and $200 million the following.
Diane Barber, director of the Pennsylvania Child Care Association, said Mr. Wolf’s budget proposal presents a “balancing act” between new state investment in early education and the tax on child care and other items, such as diapers.
“It would be a significant impact for families,” she said. “They’re not paying a tax on child care services now.”
It may be months before Pennsylvanians know whether these items will be taxed. Legislative Republicans, who hold the majority in both the Senate and the House, have expressed skepticism about Mr. Wolf’s tax proposals. The state budget is due June 30, the final day of the fiscal year.
In the Department of Revenue memo, acting Secretary Eileen McNulty notes that the changes Mr. Wolf proposes for the sales tax are similar to ones Republicans have put forward in plans to reduce property taxes.
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