GOP: Pa. House considering broader use of sales tax

Associated Press

HARRISBURG — The Republican leader in the Pennsylvania House said Tuesday budget negotiators were considering whether to apply the state’s sales tax to more goods or services in a bid to end a 5-month-old stalemate.


Majority Leader Dave Reed, R-Indiana, told reporters after an hourslong Republican caucus that budget talks remain fluid.

“There are still some details that need to be worked out with the administration and the Senate, particularly related to education funding and distribution models, that sort of stuff,” Reed said.

The House will be in session until a budget package passes, including during the coming weekend, he said.

“We have a lot of tough decisions to make over the next week,” Reed said.

There are numerous goods and services that are exempt from the Pennsylvania sales tax, which is 6 percent in most of the state, 7 percent in Allegheny County and 8 percent in Philadelphia.

Negotiators have the task of developing a cash package of about $600 million or more to prop up an agreed-to spending plan of about $30.7 billion, an increase of about 6 percent. In addition to eliminating exemptions under the sales tax, negotiators have discussed raising excise taxes on cigarettes.

Reed said he’s opposed to applying the tax to purchases of food and clothing — items he called basic necessities of life — but final decisions had not been made on which exemptions to eliminate.

“I wouldn’t say anything is locked in stone as of yet,” he said.

The Rotunda was thick with lobbyists as House Republicans gathered for hours behind closed doors to chew over budget negotiations. Issues include potential changes to the state’s two large public-sector pension plans as well as to the state-owned system of wine and liquor stores.

“I think we’re working towards a solution on liquor,” Reed said, cautioning that some details remain unresolved.

On Tuesday, the Pennsylvania Amusement Park Association and the Pennsylvania Association of Travel and Tourism issued a statement saying they are aware of discussions to remove exemptions for activities such as amusement parks, ski resorts, bowling alleys, golf courses, campgrounds and other recreational activities.

Such a move is tantamount to imposing a “tax on families and a tax on tourism,” the groups said.

An earlier agreement to increase the sales tax rate by 1.25 percentage points collapsed two weeks ago, leading to discussions about eliminating exemptions.