Memorandum
Subject: Governor Wolf’s sales tax proposal
From: Acting Secretary of Revenue Eileen McNulty
Date: March 18, 2015

The following tables identify specific goods and services proposed to become subject to sales
tax under Governor Wolf’s comprehensive tax reform plan designed to provide $3.8 billion in
historic property tax relief. The tables also identify revenue estimates for each category of
goods/services, based upon a sales tax rate of 6.6 percent.
The Governor’s proposal capitalizes on bipartisan support last legislative session to fund
property tax relief through sales and personal income tax increases introduced by House
Majority Leader Dave Reed (HB 2425), as well as similar tax increases and sales tax base
expansion proposals from Representative Jim Cox (HB 76) and Senator David Argall (SB 76).
The Governor’s plan differs very little from the expansion of items and services subject to sales
tax under HB/SB 76, however the Governor’s plan preserves existing exemptions for grocery
store food and most clothing and footwear.
By expanding the sales tax base to be more consistent with the modern economy and
increasing the personal income tax, the governor’s proposal will increase school property tax
relief for homeowners. In many communities, homeowners will receive the maximum reduction
in school property tax bills allowed by the Pennsylvania Constitution. Additionally, nearly 30
percent of Pennsylvania’s seniors will have their school property taxes completely eliminated, as
compared to only 9 percent that currently receive full relief through the Property Tax/Rent
Rebate Program.

Department of Revenue   Strawberry Square   Harrisburg, PA 17128   www.revenue.state.pa.us

 Governor Wolf's Sales and Use Tax Base Expansion Proposal (in millions)
NAICS List
Transportation

Motion Picture and Video Industries
Other Financial Investment Activities
Real Estate Agent and Broker Services
Employment Services
Business Support Services
Travel Arrangement Services

6.6% - Adjusted for Nexus, Compliance, B to B Exemption, and Post Transfers
NAICS Description
2015-16 2016-17 2017-18 2018-19 2019-20
Scenic and sightseeing industries that utilize transportation equipment to provide recreation and
4.4
12.0
13.6
14.0
14.4
48XX entertainment. The estimate also includes establishments primarily engaged in towing light or heavy
motor vehicles, both local and long distance.
Producing and/or distributing of motion pictures, videos, television programs, or commercials; in the
5121 exhibition of motion pictures; or in the provision of postproduction and related services. Includes movie
34.9
96.5
113.0
118.7
124.4
theater admission tickets.
5239 Investment advice services
5.4
14.9
17.4
18.3
19.2
5312 Agents and/or brokers engaged in buying, selling or renting real estate for others
67.3
195.1
223.0
233.2
245.7
5613 Professional employer organization services
0.4
1.2
1.4
1.5
1.5
Document preparation, call center, business service center, and other business support services, including
5614
4.0
11.1
12.9
13.4
14.0
resume writing, mailbox rental, parcel mailing
5615 Travel agency, tour operator, and other reservation services
12.1
33.2
38.5
40.2
41.9

Other Support Services, Office Administrative
Services*, Facilities Support Services*

5619,
5611,
5612

Waste Collection

5621

Higher Education
Home Health Care Services
Other Ambulatory Health Care Services

611X
6216
6219

Nursing and Residential Care Facilities

623X

Social Assistance

624X

Performing Arts

711X

Spectator Sports

7112

Museums, Historical Sites, and Similar
Institutions

7120

Amusement and Recreation Industries

713X

Recreational Vehicle Parks and Recreational
Camps

7212

Personal Care Services

8121

Death Care Services
Drycleaning and Laundry Services

8122
8123

Other Personal Services

8129

Legal Services *

5411

Accounting Services *

5412

Specialized Design Services *

5414

Scientific Research and Development Services
*
Advertising Services *
Other Professional Services* , Architectural*,
Computer Systems Design*, Consulting
Services*

Packaging and labeling, convention and trade show organizing, and all other support services, including
shredding services, Financial planning, billing and recordkeeping, personnel, and physical distribution and
logistics for others on a day-to-day contract or fee basis; Janitorial, maintenance, trash disposal, guard
and security, mail routing, reception, laundry, and related services to support operations within facilities
Collecting and/or hauling hazardous waste, nonhazardous waste, and/or recyclable materials within a
local area
Higher education charges for meal plans and fees not included as part of tuition
Skilled nursing services in the home including personal care, counseling, dietary, and speech
Ambulance, blood and organ banks, and all other ambulatory health care services
Nursing care, residential mental retardation, mental health, substance abuse, community care for the
elderly, and other residential care services
Child care, community food and housing, emergency relief, vocational rehabilitation, and individual and
family care services
Theater companies, dinner theaters, dance companies, musical groups, artists, and promoters and agents
of such facilities and individuals, except when provided by schools or nonprofits
Sports teams or clubs, racetracks, independent athletes, owners of racing participants, and sports
trainers, except when provided by schools or nonprofits
Institutions engaging in the preservation and exhibition of objects, sites, and natural wonders of
historical, cultural, and/or educational value
Amusement parks and arcades, fitness and recreational sports centers, bowling, skiing, golf course fees,
and marinas

0.7

2.0

2.3

2.4

2.5

40.5

110.9

127.4

131.6

135.9

102.4
22.7
8.9

120.9
62.6
24.6

141.0
73.2
28.6

147.8
76.8
29.9

154.4
80.8
31.4

55.2

152.4

178.1

186.9

196.6

72.6

200.4

234.1

245.6

258.5

29.0

79.6

92.0

95.6

98.9

31.3

89.3

112.1

126.8

143.4

9.5

26.2

30.3

31.5

32.7

94.1

258.7

300.0

312.6

325.5

19.1

52.1

59.7

61.6

63.5

57.1

157.1

182.3

190.2

198.4

20.9
14.0

57.3
38.4

66.6
44.5

69.4
46.2

72.4
47.9

48.5

133.5

154.9

161.6

168.6

55.3

152.0

176.5

184.1

192.1

16.8

46.2

53.7

56.0

58.4

Interior, industrial, and graphic design services

2.3

6.3

7.3

7.6

8.0

5417

Research and development in the physical, engineering, life sciences, and social sciences and humanities

14.2

39.2

45.5

47.4

49.5

5418

Advertising, public relations, media buying, direct mail, and material distribution services

1.3

3.5

4.1

4.2

4.4

5419,
5413,
5415,
5416

Marketing research and public opinion polling, photographic, translation and interpretation, veterinary
services, and all other professional, scientific, and technical services; Architectural (including landscape),
engineering, drafting, building inspection, surveying and mapping (including geophysical), and testing
laboratories; Custom computer programming, computer systems design, and computer facilities
management services; Management, environmental, scientific, and technical consulting services

25.4

69.9

81.1

84.6

88.3

Recreational vehicle parks and campgrounds and recreational and vacation camps.
Hair (including hair removal and non-medical hair replacement), nail, and skin care (including tanning, spa
treatments, makeup, permanent makeup, and tattoo) services
Funeral homes and funeral services; cemeteries and crematories
Drycleaning service, self-service laundering, and linen supply
Pet care and boarding, photofinishing, parking lots, garages, and all other (personal trainer, personal
shopper, wedding planning, house sitting, dating services, etc.)
Offices of legal practitioners known as lawyers or attorneys (i.e., counselors-at-law) primarily engaged in
the practice of law, except for family and criminal law.
Auditing of accounting records, designing accounting systems, preparing financial statements, developing
budgets, preparing tax returns, processing payrolls, bookkeeping, and billing services.

* The sale at retail or use of these business, professional or technical services are exempt from tax when performed by a business and rendered to another business.

 Governor Wolf's Sales and Use Tax Base Expansion Proposal (in millions)
NAICS
Rounding/Bracket Change

Description
No bracket, uses rounding, which causes a revenue loss

6.6% - Post Transfers
2015-16 2016-17 2017-18 2018-19 2019-20
-15.7
-39.0
-40.4
-41.7
-43.1

GENERAL/PERSONAL
Candy & Gum

311320 through 311340

Personal Hygiene Products

325610, 325620, 322291,
339994, 322120

Newspapers
Magazines

51111
51112

Non-Prescription Drugs

325412

Flags
Textbooks
Catalogs & Direct Mail Advertising

327390, 327991, 339995,
and 812200 TPP
314999
51113
32311

OTHER
Airline Catering

481 consumption of 722

Caskets & Burial Vaults

Commission
Horses
Construction Of Memorials
Uniform Commercial Code Filing Fees

43.8

107.9

110.6

113.2

115.8

22.4

55.8

57.8

59.8

61.7

9.1
4.6

21.5
11.3

21.2
11.5

21.0
11.8

20.9
12.0

58.0

151.8

164.6

178.1

192.8

Burial caskets and vaults constructed of any material

7.9

19.8

20.7

21.5

22.4

US and PA flags
School textbooks
Mail order catalogs and direct mail advertising literature

1.0
13.2
0.4

2.5
32.2
0.9

2.5
32.8
0.9

2.6
33.4
0.9

2.6
33.9
0.9

Meals purchased by airlines for passengers
Vendor discount capped at $25 for monthly filers, $75 for quarterly
filers, and $150 for semi-annual filers.
Horses purchased in the commonwealth and delivered to an outof-state location and race horses
Materials used in the construction or erection of objects
commemorating or memorializing historical events
Uniform Commercial Code filing fees, copy requests, and
certification fees

0.7

1.7

1.7

1.8

1.8

29.2

72.8

75.6

78.1

80.8

1.3

3.2

3.2

3.2

3.2

0.0

0.1

0.1

0.1

0.1

0.9

2.3

2.3

2.4

2.5

5.3

14.5

16.6

19.0

21.8

106.2

260.5

267.5

272.5

273.7

1,158.7

2,966.6

3,364.3

3,517.4

3,677.1

7.6

20.9

22.9

23.7

24.5

11.2

16.4

16.0

15.6

15.2

1,177.5

3,003.9

3,403.1

3,556.6

3,716.8

Investment metal bullion and coins. Includes precious metals
where the value of the metal is primarily a function of the metal
content (or coin) and the market value exceeds the face value.

Investment Metal Bullion & Investment Coins
Cable Television

Chocolate and non-chocolate (hard candies, jellied candies, coated
nuts and popcorn) confectionaries
Oral hygiene products (toothpaste, toothbrushes, dental floss), premoistened towelettes, disposable diapers, feminine hygiene
products, and toilet paper
Printed news publications
Printed periodical subscriptions
Over-the-counter drugs, including pain relievers, antacids, and
vitamins

517

Cable television programming

Expansion Proposal Total

Digital Downloads
Gain from Cigarette Tax Increase
Grand Total

Electronically or digitally delivered items including videos,
photographs, books, magazines, newspapers, mailing lists,
applications (commonly known as apps), software, games, music,
and any other audio
Cigarette tax increase of $1 per pack