TO:

All Senators

FROM:

Senator David G. Argall

Senator Mike Folmer
Senator Mario Scavello
Senator Scott Wagner
Senator Judy Schwank
Senator John Yudichak
Senator Lisa Boscola
Senator Andy Dinniman

DATE:November 23, 2015

SUBJECT:

Property Tax Independence Act Summary

This afternoon, we plan to offer an amendment inserting similar language from Senate Bill 76,
the Property Tax Independence Act, into House Bill 683. The standalone legislation currently has
22 cosponsors.
Here is a summary of the amendment we plan to offer on behalf of the Pennsylvania Coalition of
Taxpayer Associations.
The amendment will eliminate school district property taxes statewide for all property by shifting
to income and sales taxes. School districts carrying debt service will pay off remaining debt
service using a portion of the property tax. Once debt service at a particular school district is paid
for, the school property tax is eliminated.
School property tax revenue will be made up by the following sources:
Increase the Sales and Use Tax (SUT) by one percentage point.
Expand the base of items and services subject to the SUT.
Increase in the states Personal Income Tax (PIT) from 3.07 percent to 4.95 percent.
Gaming revenue.
The new PIT rate and SUT rate and expansion will take effect on January 1, 2016. The school
property tax elimination will take effect on July 1, 2016.
Revenue raised under the increased PIT and increased and expanded SUT will be deposited into
the Education Stabilization Fund (ESF). The ESF will provide districts with a dollar-for-dollar
match for school property tax revenue that is eliminated under this amendment. Each year,
districts will receive a cost of living adjustment based on the Statewide Average Weekly Wage.
School districts may levy an additional Personal Income Tax and/or Earned Income Tax to raise
additional revenue through voter referendum.
In addition to items currently subject to the states Sales and Use Tax, the amendment expands
the Sales and Use Tax to include the following goods:

Food (not including items on the Women Infant and Children list)
Candy and gum
Clothing and footwear over $50 per garment
Non-prescription drugs
Newspapers and magazines
Personal hygiene products, including diapers
Religious publications
Caskets and burial vaults
Flags
Textbooks
Motion picture rentals for commercial exhibition
Direct mail/mail order catalogs and magazine subscriptions
Horses
Historical markers and memorials
Computer software
Used prebuilt housing
Airline catering
Uniform Commercial Code filing fees
Metal bullion and investment coins
Alcohol served at drinking establishments

The amendment expands the Sales and Use Tax to include the following services:
- Intrastate transportation of persons utilizing air, rail, water and taxi services, including
public transportation
- Towing services
- Sightseeing and tour buses
- Movie theater and drive-in admission
- Basic and premium cable subscription
- Investment advice
- Legal services (except business-to-business, family and criminal law)
- Accounting, auditing and bookkeeping services (except business-to-business)
- Architectural and engineering services (except business-to-business)
- Specialized design services (except business-to-business)
- Advertising and public relations (except business-to-business)
- Services for buildings and dwellings (except business-to-business)
- Scientific, environmental and technical consulting services (except business-to-business)
- Information services (except business-to-business)
- Office administrative services (except business-to-business)
- Facilities support services (except business-to-business)
- Custom programming, design and data processing services (except business-to-business)
- Veterinary services (except business-to-business)
- Parking and garage services (except business-to-business)
- Employment services
- Waste management
- Non-tuition and non-housing-related charges imposed by junior colleges, colleges,
universities, and professional schools

For-profit ambulatory health care, nursing care facilities, substance abuse facilities,
retirement communities
Daycare services
Spectator sports, theater, dance and musical admissions (excluding schools, non-profit
and charitable organizations)
Museum, zoos and amusement park admission
Recreational parks and campgrounds
Haircuts and salon services
Funeral home services
Dry cleaning and laundry services

Senate Bill 76 was drafted and is supported by the Pennsylvania Coalition of Taxpayer
Associations, listed below:
Adams 912 Patriots
Allegheny Valley Citizens Against New School
Berks County Patriots
Berks Tea Party
Bradford County Concerned Citizens
Bristol Boro Taxpayers Association
Butler County Taxpayer Alliance
Carbon County Coalition of Taxpayers
Central Bucks Taxpayers Association
Central Penn Patriots
ChesCo Taxpayer Alert
Ches-Lan Anti School Tax Association
Citizens Against Higher Taxes
Citizens Against Property Taxes
Citizens for the Elimination of Property Taxes
Citizens for Responsible Education
Clearfield Co. Homeowners Against Property Tax
Coatesville Taxpayers Alliance
Columbia County Taxpayer Coalition
Community School Watch of Tulpehocken
Concerned Citizens for Common Cents Education
Concerned Citizens of Bethlehem A.S.D.
Concerned Citizens of Nazareth A.S.D.
Dallastown Area Taxpayers Coalition
Daniel Boone Taxpayer Activists
Dauphin Co. Citizens for Property Tax Elimination
Delaware County 55+ Coalition
Delaware County Taxpayers Coalition

Elverson Taxpayers Forum

Erie Co. Voters for Property Tax Elimination
Fayette Patriots
Fed Up
Franklin County 9/12 Patriots
Freeport Area Taxpayers for Home Ownership
Greene Co. Coalition of Taxpayers
Grove City Student Taxpayer Coalition
Hanover Tea Party Patriots
Lebanon 9-12 Project
Lehigh Valley 9-12 Project
Lower Bucks Co. Taxpayers Association
Luzerne County Property Owners
Mercer County Freedom Alliance
Monroe and Pike Taxpayers Association
Monroe County Taxpayer Coalition
Mon Valley Citizens for Tax Reform
Morrisville Citizens for Quality, Safe, Responsible Education
Mountain Top on the Move
Neighborhood Voter Network
Oley Concerned Citizens
Owen J. Roberts Taxpayers Association
Oxford Area Taxpayer Alliance
PA Patriots
PA Tax Talk
Pennsylvania Freedom Allies
Pennsylvania Taxpayers Cyber Coalition
Property Tax Elimination Association
Roof Garden Patriots
Rose Tree Media Taxpayers United
Schuylkill County Conservatives
Scranton & Lackawanna Co. Taxpayers & Citizens Association, Inc.
South Eastern Tax Reform Coalition
S. Berks Community Taxpayers Association
Stop Taxation On My Property
Stop Citizens Group
Stop Teacher Strikes
Taxpayers Association Of Brandywine Heights Area School District
The Patriots Voice
Taxpayers United Reform Needed
Taxpayer Survival Group

Tax Reform & Ethics Committee

Tri-County Campaign for Liberty
Union Co. Taxpayer Association
Upper Bucks Taxpayers Action Group
Valley Forge Patriots
Washington Co. for Property Tax Reform
Western Lancaster County 9.12
Western Pennsylvania Coalition of Taxpayers
Westmoreland County Taxpayer Alliance
We The People Cumberland
We The People Greene County
Wilkes-Barre City Taxpayers Association
Wyoming County Concerned Taxpayers
York 912 Patriots
York County Taxpayers Council