Pennsylvania Governor Proposes Tax on Advertising

Pennsylvania Governor Ed Rendell presented his FY10-11 budget proposal to the General Assembly last week. The Governor’s plan would reduce the state sales and use tax from 6 to 4 percent and expand the base to impose the tax on virtually all services, including advertising and public relations. More information about the proposal is available at www.governor.state.pa.us

The Republican leadership in the Senate declared that the Governor’s sales tax plan was “dead on arrival.”  However, we are working closely with industry allies and member companies in Pennsylvania to monitor this proposal.

Several years ago, the General Assembly considered legislation to provide property tax relief. The plan passed by the House of Representatives in late December 2005 would have expanded the sales tax base to cover advertising and other business services. The state Senate held a number of hearings on the bill in 2006 and ANA submitted testimony opposing the advertising tax. The property tax proposal died and a budget was ultimately adopted without any tax on advertising.

If your company has significant operations in Pennsylvania, it would be very helpful if you would contact the Governor and leadership in the General Assembly to express your opposition to any tax on advertising services.  Contact information for the General Assembly is available at www.legis.state.pa.us

Thanks for your assistance and we will keep you informed about further developments.