Expanding sales tax may be back on the table in Pennsylvania
- Sales Tax News
- Jul 21, 2017 | Gail Cole
Harrisburg remains deeply divided over how to best balance the Pennsylvania budget. Lawmakers’ inability to agree on an adequate and stable source of revenue left the state without a budget for most of FY 2016. As unpleasant as that experience was, there was still no budget in place when the new fiscal year started on July 1, 2017. Although the legislature has since agreed on a budget (it became law without the governor’s signature), it is still working to balance it. As it stands, the budget leaves the state with a long-term deficit that could cause a credit rating downgrade.
Governor Tom Wolf’s repeated calls for a higher and broader sales tax have been met with resistance, although his administration did succeed in expanding sales tax to digital downloads as of August 1, 2016. Last year, he abandoned efforts to extend sales tax to movie admissions and other services, and his 2017–2018 budget proposal called for no sales tax expansion. Interestingly, a tax on movie ticket sales, basic cable service, and utilities may, once again, be on the table.
More revenue from gambling and liquor sales
The state’s current budget loosens liquor sales and expands gambling. Historically, it’s been strangely challenging to purchase alcohol in Pennsylvania. Anyone interested in stocking up on beer, wine, and hard liquor would have to visit two or three different stores: a distributor or bar for the beer (depending on the quantity desired), and a state-run liquor store for the wine and hard stuff. Last year, the laws were loosened for the first time since Prohibition. The current budget allows for the privatization of at least some liquor sales. It also legalizes online gaming and permits gambling machines at airports, bars, and other locations.
Yet in spite of the revenue looser liquor and gambling laws could generate, the budget still remains in deficit. In recent days, therefore, talks of expanding sales tax have resurfaced.
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