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House Co-Sponsorship Memoranda
House of Representatives
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | April 19, 2024 12:05 PM |
|---|---|
| From: | Representative Paul Friel |
| To: | All House members |
| Subject: | Providing Sales Tax Collection Support for Businesses |
| Pennsylvania’s Sales and Use Tax Vendor Discount offers a small reduction in the amount of taxes owed by businesses that collect and remit sales tax to the state in a timely manner. By providing a discount, the Commonwealth aims to offset some of the costs associated with collecting sales taxes, supporting businesses and fostering a fair and efficient system for collecting sales tax. Before 2016, businesses that promptly submitted their sales tax proceeds enjoyed an unlimited discount equal to one percent of the tax collected. However, in Pennsylvania’s 2016 budget, this discount was capped at $300, regardless of the amount of sales tax collected by a business. In recent years, especially since the COVID-19 pandemic, small businesses have faced significant cost pressures. Rising expenses for fuel, agricultural products, labor, rent, and transaction fees have created enormous strain on businesses, particularly on small, local shops and restaurants. Of particular note, sales tax collection creates an additional expense for businesses in the form of credit card swipe fees. Swipe fees are charged on the sales tax itself. Businesses are required to remit the full sales tax to the state even though the businesses themselves are unable to collect the full tax amount due to the fees that are deducted from the processing of the credit cards. Despite these challenges, these retailers have remained committed to collecting sales tax. To bolster our community businesses, I am proposing legislation that expands the discount and helps to offset a portion of the additional expense incurred by businesses when they collect state sales tax. This approach not only reduces the burden on businesses but also reaffirms the state’s commitment to a mutually beneficial tax collection partnership with the private sector. By doing so, Pennsylvania signals its intent to remain fair, competitive, and supportive of our shops and restaurants. Please join me in supporting our community businesses. |