Governor Rendell's
2010-2011 PA Budget Tax Proposals
The February 9, 2010 Executive Budget presented by Governor Rendell includes significant tax proposals including a broader sales tax and heavier business taxes. The Governor's proposed 2010-2011 Budget would broaden the state sales tax while lowering the rate from 6% to 4%. Proposed changes to the state sales tax would expand the sales tax to a number of goods and services currently exempted including but not limited to:
- Advertising
- Residential Utilities: Electric
- Custom Programming
- Residential Utilities: Fuel Oil/Gas
- Architectural and Engineering
- Professional and Technical
- Liquor or Malt Beverages from Retail Dispensers
- Amusement & Recreation Industries
- Water and Sewage Services
- Personal Care
- Residential Utilities: Telephone
- Parking Lots
- Specialized Design
- Non-Prescription Drugs
- Funeral Parlors
- Other personal services
- Personal Hygiene
- Rental of Films for Commercial Exhibition
- Air Transportation
- Information Services
- School Buses
- Museums, Historic Parks, Zoos & Parks
- Charges for Returnable Containers
- Horses
- Investment Metal Bullion
- Commercial Vessels Construction and Repair
- Airline Catering
- Hotel-Permanent Resident
- Stair Lifts
- Helicopters
- Trout
- Motor Vehicles (out-of-state purchasers)
- Administrative Services
- Financial Institution Fees
- Consulting
- Accounting
- Scientific Research
- Basic Television
- Services to buildings and dwellings
- Coal
- Waste Management
- Common Carriers
- Candy and Gum
- Gratuities
- Manufacturing exemption (public utility)
- Newspapers
- Truck Transportation
- Parks and Campgrounds
- Dry Cleaning
- Textbooks
- Theater, Dance, and Music Tickets
- Caskets
- Call Center Credit
- Magazines
- Bad Debts
- Commercial Vessels (Equipment and Maintenance)
- Catalogs and Direct Mail Advertising
- UCC Filing Fees
- Other Transportation
- Tourist Promotion
- Firewood
- Construction of Memorials
- Fish Feed
- Electrical, plumbing, heating, Air Conditioning
- Wrapping and Packing
Groceries, clothing, prescription drugs, tuition and legal and medical services will remain exempt.
Unfortunately, the proposal would also tax many businesses like advertising, fuel and truck transportation which will result in double taxation for some goods and services.
Under Governor Rendell's proposed sales tax proposal, entities required by law to collect and remit sales taxes previously permitted to keep part of the gross for administrative costs for these services will no longer be able to keep those charges.
Among the business tax changes proposed by Governor Rendell would be the reduction in the corporate income tax rate from 9.99% to 8.99%, the elimination of the net operating loss (NOL) carry-forward cap and the imposition of a combined reporting and singles sales factor apportionment.
The Pennsylvania House of Representatives Appropriation Committee approved Governor Rendell's proposed spending plan on Monday, March 8th. The Appropriation Committee vote was along party lines. House Appropriations Chairman Dwight Evans (D., Phila.) expects a vote by the full House on March 22, 2010. The proposal then must be submitted to the Pennsylvania Senate for final approval, reconciliation and submission to the Governor.
