For Immediate Release
July 27, 2017
HARRISBURG - Pennsylvania Chamber of Business and Industry President and CEO Gene Barr issued the following statement in regard to the Senate’s passage of a revenue package for the 2017-18 Fiscal Year. House Bill 542 – which includes a number of tax increases on Pennsylvania residents and business owners – will have far-reaching, negative impacts on the state’s economic climate and competitive edge.
“We’re disappointed that the Senate has voted in favor of a $600 million tax increase that will hurt Pennsylvania’s ability to compete and will increase job creators’ operating costs for electricity, natural gas and communications services. At a time when the state’s unemployment rate has consistently been above the national average, proposals like H.B. 542 – which will make Pennsylvania’s business climate more burdensome – will only further weaken the state’s economic growth.
“Pennsylvania has few competitive business advantages – affordable, accessible energy - particularly natural gas - is one of them. However, this revenue package attacks that advantage by reinstating a gross receipts tax on natural gas users and imposing an additional severance tax on the natural gas industry. Should this proposal be enacted, natural gas will be taxed, in essence, four times: prior to drilling and on an annual basis with the impact tax; during production with the severance tax; at consumption with the gross receipts; and finally, every year with business and income taxes on any company involved in drilling, moving or using natural gas. To say that these additional taxes won’t impact this industry – which has been one of the few bright spots in Pennsylvania’s down-turn economy – couldn’t be further from the truth. These taxes will drive economic opportunity and jobs to other more business friendly states in the shale play.
“This revenue package also raises the gross receipts tax on electric customers and places a 5 percent tax on virtual markets and transmission rights – further increasing energy costs for Pennsylvania businesses and, again in particular, large industrials and manufacturers. Other tax proposals that are part of the package – such as the higher tax on telecommunications and certain online transactions, as well as changes to the state’s tax appeals process – will also increase costs for employers. A related budget bill also includes a provision that will further increase costs for all electricity users by increasing the cost of complying with the state’s already expensive solar energy subsidy and alternative energy mandates.
“This revenue package will further slow Pennsylvania’s economy by increasing the cost of doing business in the Commonwealth and hindering our ability to compete on a global stage. We strongly urge the House to stand up for Pennsylvania’s job creators and taxpayers and vote no on this ill-conceived proposal.”
The Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its statewide membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.