Bitcoin, Halloween candy, pet food and exercise equipment could all get a sales tax holiday if Pennsylvania lawmakers can, for the first time in the state’s history, succeed in passing legislation to pull it off.
Pennsylvania has never had a time-stamped sales tax break, where companies — largely retailers — would not have sales and use taxes on specific items. The state does already have permanent, product-based exemptions for essential items like food, clothing and medication.
House Republicans rolled out the tax holiday proposals as a package through a series of memos. Official legislation has not been introduced.
Pennsylvania’s 6% sales and use tax goes to the state’s general fund to support basic services like public safety, education and infrastructure. It brought in $14.7 billion in the last fiscal year, according to the state’s Department of Revenue.
“The department has not been asked to analyze any of the recent proposals for Sales & Use Tax holidays,” Brandi DeAngelo, deputy communications director for the revenue department, wrote in an email response to questions from the USA TODAY Network Pennsylvania.
A six-month gas tax holiday was also floated, which could save motorists at the pump, according to one of the memos put out by state Rep. Abby Major, who serves Armstrong and Westmoreland counties. It would begin June 1, if enacted as proposed.
How is Pennsylvania’s gas tax assessed?
Pennsylvania’s gas tax, nearly 58 cents per gallon, is among the nation’s highest. It gets assessed at the wholesale level, not at the pump, according to Alexis Campbell, PennDOT press secretary. With gas prices set by the industry, companies decide how or whether taxes are passed on.
State and federal gas taxes provide more than 70% of the state’s highway and bridge funding, Campbell explained. Some of that money goes to municipalities to support locally owned roads as well as PA Turnpike and the Pennsylvania State Police.
Democratic state Sen. Lisa Boscola, from the Lehigh Valley area, sought to put a 60-day suspension on the state’s fuel taxes earlier in March. A similar effort failed in 2022, when legislators responded to a spike in oil prices after Russia’s invasion of Ukraine.
Gov. Josh Shapiro’s communications office did not return a request for comment on the proposals.
What items are pitched for sales tax holidays in Pa.?
Other items planned for a tax holiday include soccer and football equipment; flags; gardening and lawn supplies; formal attire for high school prom; bicycles; fencing used in agriculture; back-to-school supplies; grills; fireworks, and costs for “new and growing families.”
Sales tax holidays are not novel, said Neal Lesher, government affairs director for the Pennsylvania Chamber of Business and Industry, a business advocacy group with around 13,000 members. Not every business would be affected by the holidays.
The organization’s retail sector is large, Lesher said. “I think individual businesses would welcome it. It could drive sales during that time period.”
Some states implement seasonal exemptions, like on certain supplies during back-to-school shopping season.
