Sales, Use and International Tax Activity Update - September 2009

Pennsylvania Battles Budget Woes with New (and raised) Taxes

Pennsylvania

On September 18, Governor Rendell and the legislative leaders finally came to an agreement on a $ 27.95 billion budget. The Commonwealth of Pennsylvania is the last hold out of the Fiscal Year 2009-2010 budget cycle. Certain tax increases will impact some businesses and their related consumers but the main tax bases of personal income taxes and most sales and use taxes were not affected. The sources of the extra revenues are expected to come from the following tax sources:

• Increase in the cigarette tax to 25 cents per pack
  
• Apply the cigarette tax to “little cigars” or cigarellos
  
• Apply the sales tax to the price of admission to music concerts and other performing arts, museums, historical sites, zoos and parks.
  
• Raise the capital stock and franchise tax paid by some businesses
  

Other revenues are expected to come from gambling, leases of state forest lands for gas drilling, and the tapping of reserves.
Currently, the legislature is working hard to firm up the statutes for the governor’s signature.

The following Associated Press article dated September 28, 2009 addresses the current debate regarding the application of sales tax to admissions and entertainment events.

Additional information may be viewed at: http://finance.yahoo.com/news/Pa-arts-tax-debate-shows-apf-954352936.html?x=0&.v=1&.pf=taxes&mod=pf-taxes

Philadelphia
On October 8, 2009, the sales tax rate for the City of Philadelphia will increase by 1 % to help the city meet the funding of its pension plan. The combined rate will increase to 8 %, the highest rate within the state. The city of Pittsburgh increased their parking tax rather than affecting the Allegheny County sales tax rate.
The increased rate in Philadelphia includes a sunset provision and is expected to expire on June 30, 2014.

View the full published announcement on the Pennsylvania Department of Revenue Website.

---

Subscribe to CyberTax News and receive the latest indirect tax news, including rate changes, rule updates, compliance issues, and more, delivered directly to your email.

Email Address

e.