Pennsylvania Governor Seeks Sales Tax Increase

Governor Tom Wolf (D) is determined to provide historic tax relief for the people of Pennsylvania. To that end, his 2015-2016 Budget proposes significant changes to personal income tax and sales tax. This blog focuses on sales tax.

The 2015-16 Governor’s Executive Budget suggests both increasing the rate of sales tax and expanding it to more services. The Pennsylvania budget calls for the following:

• Increase the state rate from 6% to 6.6%, effective January 1, 2016.
• Broaden sales tax to numerous services.
• Eliminate “outdated exemptions” for basic television services, candy and gum, and amusement and recreation.
• Maintain exemptions for clothing, food, and prescription drugs.

All told, sales tax would apply to an additional 45 items under the budget proposal. These include, but are not limited to the following:

• Amusement and recreation
• Business support services
• Cable television services
• Candy and gum
• Caskets and burial vaults
• Catalog and direct mail advertising
• Dry cleaning services
• Flags
• Home health care services
• Legal services
• Non-prescription drugs
• Magazines
• Museum, historical sites and similar institutions
• Newspapers
• Personal hygiene products
• Textbooks
• Transportation services
• Waste collection

Automated sales tax software as a service allows businesses to stay on top of sales tax changes in Pennsylvania and other states. Learn more.

photo credit: IMG_4402 via photopin (license)