York biz owners want more details on proposed sales-tax increase


Gayle Shadrach started her York City custom framing business 27 years ago, but if she were choosing where to locate her business now, a potential increase to the state sales tax might make her "think twice" about settling into Pennsylvania, she said.

Under the most recent proposed budget agreement, Pennsylvania's sales tax would rise from 6 percent to 7.25 percent, a 21 percent increase. The rate would give Pennsylvania the second-highest sales tax rate in the nation, behind California, according to Associated Press reports.

Shadrach, owner of Art and Framing Warehouse on West Philadelphia Street, said people are already hesitant to spend their money, especially at a store such as hers, which sells luxury items.

"It would be one thing if the economy was booming, but it's not," she said.

Owners of restaurants, where profit margins are typically thinner than other businesses, are also worried about a potential increase.

Danette Small-Shultz, co-owner of Stone Grille and Taphouse in York Township, said the proposed increase wouldn't raise prices much, but it adds up quickly.

"Everyone only has so much extra income to spend on food," she said. "It might not be a lot on each item, but it adds up at the end of the week."

Small-Shultz, whose restaurant is located near the Country Inn and Suites hotel, said she's most worried about the potential impact an increased sales tax would have on tourists.

Not all small business owners are necessarily concerned about the potential increase, but one concern appears universal: not enough details have been released.

School taxes: Early reports are that the increase in sales tax, which would create an additional $2 billion, would be used to lower school property taxes, but Democratic Gov. Tom Wolf has acknowledged that many details in the proposed budget remain unsettled.

Small-Shultz said it seems as though legislators have been promising decreased property taxes for a long time, but it would potentially be a positive if the reports are true.

Darrell Auterson, president and CEO of the York County Economic Alliance, said he's just encouraged that the proposed budget appears to indicate a more productive dialogue occurring after such a long impasse.

Auterson said it's too soon to form a definitive opinion on the budget proposal, which Wolf said he hoped to finalize and pass before Thanksgiving. When his organization works to recruit businesses to the county, sales tax is "just a small piece" of the overall policy, Auterson said.

Pennsylvania is "pretty gracious" on items that are exempt from sales tax, which include clothing and unprepared food, he said.

Gayle Lanphier, co-owner of Nuts About Granola in York City, agreed, saying that an increased sales tax would have minimal impact, but a change to the items that are taxable would affect everyone.

No reports have indicated any proposed additions to taxable items.

Caroline Morris, owner of Kimman's for Gifts in York City, joked that "the biggest pain for shop owners would be reprogramming the computers" to account for the change in tax rate.

Regardless of what changes are made to the state's tax rates, Auterson said it's important that the lawmakers not "create an overly burdensome tax climate that would discourage future business investment."

"Whether real or not, no one benefits from creating a perception that (Pennsylvania) is less business-friendly than surrounding states," he said.

— Reach David Weissman at dweissman@yorkdispatch.com.