Possible sales tax on looms for
Pennsylvania cleaners
Pennsylvania cleaners are one step closer
to having to collect sales tax on drycleaning; however, this
issue remains up in the air at this time.
Recently, the Pennsylvania House of
Representatives voted to extend the state sales tax to include
drycleaning, along with 18 other industries and products not
currently considered taxable, such as advertising (including
direct-mail), shoe repair and storage, management consulting,
public relations and clothing repair.
Other newly-taxable items on the list are:
airline catering; amusement devices; candy and gum; catalog
advertising; magazines; memberships in fitness clubs; office
cleaning services; personal hygiene products; storage; trailer
parks and camps; and vending machines.
The measure is currently being debated in
the state senate.
In fact, Dale Kaplan, who serves as vice
president for government relations for the Pennsylvania
and Delaware Cleaners Association, was asked to testify against the sales tax’
expansion in January.
So far, he has contacted several PDCA
members to enlist their aid in writing and calling state
senators in order to voice the drycleaning industry’s
concerns. To further strengthen the cause, Kaplan has also
worked alongside a coalition of business groups to oppose the
proposal, which has been labeled SB 854.
The measure seeks to levy an extra $2
billion by raising personal income tax to 3.29 percent, a 22%
increase, in addition to greatly expanding the scope of the
state sales tax.
House members who voted in favor of the
plan cited that it will offer residential property tax relief
and increase the state’s financial commitment to public
education.
However, detractors of the bill note that
the amount of money expected to be raised will not be
sufficient to make a significant impact.
Additionally, business owners have cited
that they will be the ones expected to collect the tax and
submit it to the state, yet they will not get any relief from
business property taxes. Some studies have already indicated
that Pennsylvania businesses pay more taxes per capita than
most states in the nation.
Other problems that may arise for
Pennsylvania business owners if the bill becomes law include
that they will have to pay new taxes if they seek advice on the
management of hazardous materials or assistance in any
expansion decisions.
Entrepreneurs seeking advice on starting
a new business will also be subject to the new tax.
The initiative will additionally provide
loopholes that will allow school districts to raise taxes
without voter approval.
On a more direct level, many drycleaners
believe their business income will suffer greatly if the
measure passes. When the state’s sales tax was originally
formulated, items such as food, clothing and necessities like
household paper products were all exempt. Drycleaning clothing
was considered an essential part of cleanliness not to be
taxed, unlike cleaning household items like draperies, which
are taxable.
The National Federation of Independent
Business had made it easy for anyone to voice their opposition
to SB 854. The organization has prepared a legislator contact
page with more information about the initiative, as well as a
letter that PA residents can send to their local lawmaker.
Go online to the site at http:
//capwiz.com/nfib/issues/alert/?alertid=8339596 and fill out your zip code, name and
contact information. The page is also accessible from visiting
www.nfib.com/pa.
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