It Makes Pennsylvania Uncompetitive

"Mr. LONGIETTI. Thank you, Mr. Speaker.

Mr. Speaker, this amendment, like virtually every proposal that we will be debating on property taxes, is a tax shift. It is a reduction of property tax, but a replacement by increasing some other tax. The difference between this amendment and many of the other proposals is that this amendment would broaden or tax services that we have not traditionally taxed in Pennsylvania. We would tax things for the first time. And one of the problems that I have with this amendment is that it drives up the cost of doing business. It makes Pennsylvania uncompetitive. And it is particularly harsh on small businesses, because now businesses that have not collected sales tax for the first time would have to hire staff, collect the tax, account for the tax, remit the tax on a quarterly basis, and be audited on the tax.

For the first time, we would be taxing services that have not been taxed, and we would be giving to the Department of Revenue the power to interpret this amendment, and the Department of Revenue tends to interpret it broadly, because now we are saying that all services would be taxed unless specifically excluded. We would be taxing things like, as was pointed out earlier, ATM fees. When you go to the ATM and you make a withdraw and you are subject to a fee, that gets taxed. If you go to your lawyer to have a will drawn up, we would be taxing that service for the first time. I know as someone who practiced law for 18 years, it was always important to me to keep the cost of a will down for my client, because I wanted to encourage people to make sure that they had a will. Now we are going to tax that. When people go to H&R Block or to an accountant to have their taxes done, we are going to tax that service for the first time. When you get sued in court, even if you do not believe that you have done anything wrong, when you get hauled into court, we are now, under this amendment, going to tax legal services when you are trying to defend yourself.

So when you look at this amendment, it taxes far too many things and it drives up the cost of business, particularly small business. It makes us uncompetitive. It is not helpful to economic development. In fact, it is harmful to economic development in that regard and could lead to job cuts. So inasmuch as I am in favor of property tax relief, this measure is the wrong approach for all those reasons, and for those reasons I respectfully ask my colleagues to join me in voting against this amendment.

Thank you, Mr. Speaker"

State Representative Mark Longietti, House Legislative Journal, January 28, 2008