A bipartisan vote of 70 Republicans and 32 Democrats Tuesday was enough to pass a Tax Code bill– House Bill 542 (Thomas-D- Philadelphia)– another attempt at putting a revenue package on the Governor’s desk to support the $31.9 billion General Fund budget the General Assembly passed in June.
House Majority Leader David Reed (R-Indiana) said the bill authorizes the Commonwealth Financing Authority to borrow $1.5 billion by securitizing or “liquidating” the Tobacco Settlement and possibly some other General Fund monies, would apply the Sales Tax to online marketplaces ($43.5 million) and impose a new 12 percent assessment on fireworks purchases ($31.7 million).
Also included are provisions related to the Net Operating Loss in the event of an adverse PA Supreme Court decision*, changes to the timing and withholding of individual and lease taxes, a deduction for manufacturing innovation and reinvestment was added along with establishing two film production tax credit districts and an entertainment economic enhancement program tax credit for rehearsal areas.
There is no commercial storage, hotel or natural gas severance tax. Click Here for more on the severance tax.
There are no environmental riders and the Wild Resource Conservation Tax Checkoff is also extended indefinitely.
Click Here for a House Fiscal Note and summary.
The bill now goes back to the Senate for a concurrence vote.
Senate Majority Leader Jake Corman (R-Centre) said Wednesday the Senate will give the House revenue package “serious consideration” over the next few days and hopefully come back next week ready finish work on the budget, adding “there is a lot of value in getting this done.”
He said amending what the House sent over and returning it and expecting success was a longshot at best.
Gov. Wolf’s office said the House proposal does not meet the Governor’s targets for new, recurring revenues and again urged the General Assembly to pass a natural gas severance tax.
The Governor’s Office expressed the hope this proposal will serve as a launching point for the next, and hopefully final, round of budget negotiations.