HARRISBURG - Two Northeast Pennsylvania senators offered an amendment Monday clarifying what would be taxable and exempt under legislation to replace school property taxes with expanded state sales and income taxes.
The amendment by Sens. David Argall, R-29, Tamaqua, and John Yudichak, D-14, Plymouth Township, is intended to build momentum in the Senate for this much-publicized bill to tackle this perennial issue. The bill would increase the state sales tax from 6 percent to 7 percent and the state income tax from 3.07 percent to 4.34 percent to generate revenue to replace property taxes.
The amendment would specify what services such as lawn care, self-storage and building maintenance to name several, would be subject to the sales tax. And it specifies that food and beverages available under the Women Infants and Children program and items of clothing under $50 would be exempt from the sales tax.
The Senate Finance Committee is scheduled to hold a hearing on the bill Wednesday. "We believe we are closer than ever before to slaying the school district property tax dragon," Argall said.
"We are taking on a big dramatic change," Yudichak said.
The House voted overwhelmingly last fall for a new optional school property tax reduction bill. The measure would give school districts the choice of shifting partially or completely away from relying on property taxes to a mix of an additional earned income tax on wages and a tax on business gross receipts.