The good and the bad for small business
Gov. Tom Wolf has just signed into law the legislature’s approved plan for funding the current 32-billion-dollar state budget and to filling an overage in last year’s spending. The final funding package has positive and negative elements with regards to small business.
NFIB successfully worked to stop increased taxes on natural gas, electricity usage, and phone service. We thank so many of our members for writing letters to lawmakers on this issue! Taxes on commercial warehouse storage, IT services, a hotel tax increase, and a hike in the Personal Income Tax were averted.
A group of conservative House members who opposed increased taxes poured over the state budget with a fine-toothed comb and found many pockets of untapped designated funds. The final budget plan does take $500 million of these dollars and moves them into the general fund.
The state will expand gambling in hopes of creating an ongoing source of new revenue estimated at $238 million in the first year. The expansion includes new satellite casinos, video gaming terminals in locations like airports and truck stops, and internet gambling. The lottery’s electronic Keno game may now be played at bars and taverns.
An effort to tax natural gas production at the Marcellus Shale did not pass. Currently, gas producers pay an impact fee to state and local governments where drilling is taking place.
Businesses that use out of state contractors will now be required to withhold these vendors’ PA income taxes when paying invoices and submit the money to the Dept. of Revenue. NFIB vehemently fought this proposal without success.
The state will borrow $1.5 billion from the tobacco settlement funds, which has in the past been used for health and research. That will result in $2 billion in interest over a 20-year period and could further lower Pennsylvania’s credit rating.
New taxes will be enforced on purchases from online vendor marketplaces like Amazon. And fireworks will now be taxed at 12%.
During the budget process Dept. of Labor and Industry fees increases were approved for things like elevator and boiler inspections. On the regulatory front, there are a flurry of Dept. of Environmental Protection fee increase requests making their way through the approval process. They would raise the cost of many inspections, permits, and licenses related to air and water quality.