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Pennsylvania - Eliminating Property Taxes for Schools

by Tom Branham, Washington D.C., May 2013

 

Pennsylvania lawmakers are debating bills that would do away with property tax funding for public education. Critics say the proposals amount to a tax swap that would be especially harmful to residents who don't own real estate.

 

Déjà Vu

 

Eliminating school property taxes isn't a new idea in Pennsylvania. A similar Bill (HB 1776) was defeated last year. Before that, the idea was rejected in 2008 (HB 1275).

 

The current legislation before the General Assembly is House Bill 76 and Senate Bill 76.

 

If approved, these bills will raise the:

 

  • Sales tax from 6 cents on the dollar to 7 cents, and

  • Personal income tax from 3.07 cents per dollar earned to 4.34 cents

 

How this legislation affects you will depend on your specific income tax scenario, the school tax rate in your jurisdiction and the assessed value of your property.

 

Expanded Sales Tax

 

Under the proposals, goods and services that are currently not taxed will be subject to sales tax. (See table.)

 

As always, POER will keep you apprised of this and other legislation that has the potential to impact your property tax burden.

 

 

Newly Taxable Goods

 

Newly Taxable Services

*

Food (Items not on

WIC food list)

*

Personal hygiene

products

*

Newspapers

*

Magazines

*

Clothing and footwear

(items $50 and higher)

*

Non prescription drugs

*

Airline catering

*

Charges for returnable

containers

*

Caskets and burial vaults

*

Flags

*

Hotel permanent resident

*

Liquor or malt beverage

purchased from retail

dispenser

*

Coin-operated food

and beverage vending

machines

*

Candy and gum

*

Storage

*

Bad debts

*

UCC filing fees

*

Call center tax credit

*

Rental of films for

commercial exhibition

*

Investment metal bullion

and investment coins

*

Catalogs and direct

mail advertising

*

Construction of

memorials

*

Horses

*

Textbooks

*

Commission – SUT

collectors (capped at

$250/month)

 

Professional Services

*

Legal (except business-

to-business, domestic

relations matters and

criminal defense matters)

*

Architectural, engineering

and related services

(except business-to-

business)

*

Accounting, auditing and

bookkeeping services

(except business-to-

business)

*

Specialized design

(except business-to-

business)

*

All other professional and

technical services (except

business-to-business)

 

Personal Services

*

Dry cleaning and laundry

services

*

Personal care services

*

Funeral parlors,

crematories, and death

care services

*

All other personal

services

 

Recreation Services

*

Spectator sports

admissions (excludes

schools)

*

Theater, dance, music

and performing arts

*

Amusement and

recreation industries

*

Museums, historical sites,

zoos and parks

 

Transportation Services

*

Transit and ground

transportation

*

Air transportation

*

Truck transportation

*

Other transportation

 

Miscellaneous Services

*

Basic TV

*

Veterinary fees (except

business-to-business)

*

Finance and insurance

*

Waste management

and remediation

*

Recreational parks,

camps & campgrounds

*

Custom programming,

design and data

processing (except

business-to-business)

*

Parking lots and garages