Legislators Oppose Sales Tax Expansion on Professional Services
HARRISBURG, MAY 3, 2010 — Several lawmakers today called on Gov. Ed Rendell to drop his budget proposal to expand the sales tax to include some professional services.
Under the governor’s budget proposal, a 4 percent sales tax would be levied on accounting, financial, legal, medical and architectural services.
State Sens. Mike Stack, Larry Farnese, Daylin Leach, Lisa Boscola, Andrew Dinniman and Anthony H. Williams sent a letter to Rendell to express their opposition to this tax expansion plan.
“With our economy still struggling, it is inappropriate to burden the people of Pennsylvania with this tax expansion and it’s counterproductive in an era of cost cutting and penny-pinching,” said Stack (D-Philadelphia). “There are way too many unanswered questions on how a professional services tax would be implemented and collected. Right now, we do not need to burden Pennsylvanians with this tax.”
The budget plan that recently passed the House of Representatives (House Bill 2279) did not include the sales tax expansion, even though it closely mirrors the governor’s budget plan that was introduced in February. Also, the Democratic lawmakers determined that this plan lacks substantial bipartisan support.
“This plan is simply too aggressive and disproportionately impacts Pennsylvania’s lower income population,” said Leach (D-Delaware/Montgomery). “At a time when we’re fighting to keep full funding for state programs and services, a tax expansion would only be a setback.”
The sales tax expansion would also hurt the business sector because many small businesses rely on contracts for the professional services that would be taxed, the senators said.
“A 4 percent tax on professional services would further chill an already stalled economy,” said Farnese (D-Philadelphia). “We must look for ways to stimulate business without taxing consumers.”
“It appears that our nation and commonwealth are finally starting to emerge from our latest recession,” said Boscola (D-Lehigh/Monroe/Northampton). “But this plan would impede that resurgence by placing an additional financial hardship on the Commonwealth’s small businesses — the same businesses that employ over 98 percent of our workforce in Pennsylvania.”
“Businesses cannot reinvest in the community if they are forced to pay taxes on the various professional services that they need,” said Dinniman (D-Chester/ Montgomery). “We cannot get the economy moving forward if businesses are forced to pay this proposed tax.”