For Immediate Release
November 15, 2005

Pennsylvania Tax Bill Proposes Broad Sweeping Changes

Pennsylvania Tax Bill Proposes Broad Sweeping Changes

Pennsylvania Tax Bill Proposes Broad Sweeping Changes

trade off for reduced property taxes.

Legislation is proposed that would lower the state tax rate from 6% to 5%, and broaden the tax base by taxing most all services, except for medical services. Insurance premiums, gains from certain investments and the rental of real property would also remain exempt.

The plan also calls for taxing food and clothing, but would eliminate the school property tax, while keeping county property taxes intact. Food stamp purchases would be exempt, as well as prescription drugs and public transportation. The taxation of telecommunications would not change.

Public opinion is that the Bill will not pass in its present form. Its contents have been floating around in various forms for five years. Its main popularity is the promise of reducing property taxes, a popular theme among many states. Proponents say eliminating the school property tax will draw more businesses to the state. Opponents argue that it would put Pennsylvania service providers at a disadvantage, arguing that if a business in PA can purchase a service in NJ untaxed, why would it pat 5% more to hire an in state service?

The Bill comes up for consideration this fall.

If you would like additional information on this topic or have any questions, please contact the taxdesk@thesaltgroup.com

 

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