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Many Wild Cards in Sales Tax Debate

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Under various proposals before legislative committees, PA counties could have the ability to tack on an extra percentage point on to the existing state sales tax, thus giving counties a local option tax, something that only Philadelphia and Allegheny currently have. Bills snaking there way through would either apply to all counties except the two that already have the tax, to Philadelphia only, or to third class cities only.

The most recent PA tax manual shows that of all classifications of local government counties raised the most tax money (97%) from real estate taxes, even more than school districts (many levy the wage tax) and money from a sales tax could be used to offset real estate tax revenue. No mention has been made of replicating the Regional Asset District set-up of Allegheny County or the general budget use of Philadelphia if the tax were to go into effect.

Of course, there is still the possibility that the state budget deliberations could involve the state raising the sales tax in order to pay for its own budgetary needs, which would likely forestall the counties getting the add-on. And then there is still the prevailing attitude that taxpayers don’t want any tax increases and county commissioners being reluctant to adopt the tax.

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