Governor Wolf Proposes a Tax on Services

tax2In a move called by some “bold,” Pennsylvania’s new Governor Tom Wolf has proposed a new 6.6% tax on services — everything from daycare, barbers and hairdressers, lawyers and accountants, nursing homes, and funeral services — to provide more money for state subsidies to schools and a bigger property tax rebate. As with the sales tax (slated to be increased from 6% to 6.6 %), the new tax will be paid by the consumer who buys the haircut, uses daycare or legal services.

If enacted, the sales tax would exempt doctors, dentists and hospitals, but would, for the first time, be applied to personal hygiene products, newspapers, caskets and burial vaults, cable television, sports and arts events, flags, textbooks, real estate broker, travel agent, computer and advertising services. Oddly, the Governor’s proposal would exempt business to business services, but not consumer services, so General Motors, which deducts its legal bills as an expense on its federal tax return would NOT pay the tax when hiring a law firm, but a family who uses a lawyer when selling a house or doing a will or a woman who needs a lawyer for a custody matter would be paying an extra 6.6% on their legal bills.

Pennsylvania is required to balance its budget each year by June 30. If you have an opinion on this new sales tax on services, you should be sure to contact your own legislator to share your views before the vote is taken. You can email or write directly to your legislator at:  (March 6, 2015)

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