October 3, 2017

House Moves Compromise Tax Bill For Debate Wednesday

The House Rules Committee late Tuesday amended and reported out the Tax Code bill-- House Bill 542-- with a statewide, five percent hotel tax that House Majority Leader David Reed (R-Indiana) hopes will break a logjam in the budget process.  Click Here for an amended copy of the bill.
The hotel tax is expected to bring in $96 million this year and $165 million next year.  Rep. Reed said there is agreement with the Senate and Gov. Wolf on the hotel tax. However, a spokesperson for Gov. Wolf told the AP this evening he is still reviewing the bill and still believes "strongly" a natural gas severance tax would be the most responsible recurring revenue.
He hoped the House could begin debate on the tax bill yet Tuesday night, but at 7:30 p.m. the House announced it will return Wednesday morning at 9:00 a.m.
Rep. Reed said the package retains the provisions related to applying the Sales Tax to online marketplaces, a 12 percent assessment on fireworks purchases, provisions related to the Net Operating Loss in the event of an adverse PA Supreme Court decision.
The amendment also made changes to the timing and withholding of individual and lease taxes, added a deduction for manufacturing innovation and reinvestment, establishes two film production tax credit districts, established an entertainment economic enhancement program tax credit for rehearsal areas
He said gone from the package are the increases in the natural gas, electric, telephone gross receipt taxes.  Also not included is a commercial warehouse tax talked about for the last two days and presumably a natural gas severance tax.
Also gone is the Regional Electric Transmission Transaction Tax.
With respect to gaming, he said things are moving in a positive direction, but things are not fully resolved.  Asked about video gaming terminals, Rep. Reed said everyone knows the House and Senate were in different places on the issues, but he said House Republicans are willing to “give a little bit to get a little bit in return.”
“This is a major piece [Tax Code bill],” Rep. Reed said.  “This is the component that has been holding up the process so far.”
Click Here for a copy of the amended bill.  Click Here for a summary by House Democratic Appropriations. The new language begins on page 104.
(Based on a Periscope app webcast by PLS Reporter.)
AP: Gov. Wolf Mum On Higher Hotel Tax