Saturday, August 30, 2014
Inquirer Daily News

House committee approves Rendell revenue plan - minus sales tax

Late Tuesday - when all of Harrisburg was focusing on Gov. Rendell's transportation address to the General Assembly - the House Appropriations Committee quietly passed a bill containing most of the governor's revenue proposals.

House committee approves Rendell revenue plan - minus sales tax

Late Tuesday - when all of Harrisburg was focusing on Gov. Rendell's transportation address to the General Assembly - the House Appropriations Committee quietly passed a bill containing most of the governor's revenue-generating proposals.

In a party line vote the Democratically-controlled House committee approved legislation (HB 2435) that would:

Eliminate the one percent vendor sales tax discount which has allowed sales and use tax licensees to claim a discount upon timely remittance of sales and use tax returns.

Close the so-called "Delaware loophole" that has allowed corporate taxpayers to avoid certain state taxes by locating business addresses in Delaware.

Impose a first-ever tax on cigars and smokeless tobacco at a rate of 30 percent on the purchase price charged to the retailer.

Impose a new "severance tax" on natural gas extraction at a rate of 5 percent of the value at the wellhead plus 4.7 cents per 1,000 cubic feet of natural gas extracted.

All told the new taxes would bring in $300 million in the first year, according to Rep. Dwight Evans (D., Phila.), the chairman of the House Appropriations Committee - not enough to close the $1 billion-plus gap but enough to make a dent. Evans says he expects a vote by the full House by the end of May.

A not insignificant omission. Not included was Rendell's proposal to reduce the state's sales tax (from 6 percent to 4 percent) but expand it to include 74 items and services not currently taxed - an idea that garnered little support from either party in the legislature.

 

 

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About this blog

Commonwealth Confidential gives you regularly updated coverage of the state legislature, the governor and the workings of the state bureaucracy. It is written by Angela Couloumbis and Amy Worden in the Inquirer's Harrisburg bureau, based right in the statehouse, and by the newspaper's far-flung campaign reporters.



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