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PA New Taxes–Bulletin from The Commonwealth Foundation

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Commonwealth Foundation for Public Policy Alternatives
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Monday, August 1, 2016

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Dear CF Friend,

This weekend did you:

a.) Watch a show on Netflix
b.) Stream music on Spotify
c.) Download an app or song on your smart phone
d.) Read a book on your Kindle
e.) All of the above

Welcome to August, Pennsylvanians. You’re now taxed on all of that.

Though if none of those taxes put you out of business, consider yourself lucky. Along with digital downloads and streaming services, lawmakers included a new tax on electronic cigarettes in their recent $650 million tax hike. Between 320-350 vape shop owners are facing massive taxes that threaten their livelihood and the jobs they’ve created.

Chris Hughes has owned Fat Cat Vapor Shop for almost three years. The shop specializes in electronic cigarettes, which many people seek as a healthier alternative to traditional smoking.

“I went into business to help people,” Chris said, but his capacity to help others is now in jeopardy.

Included in the new tax package, the state Legislature added a 40 percent excise tax on Chris’s vape shop and others like it. Worse, the tax is retroactive—he must also pay the tax on inventory he bought well before any votes.

According to Chris’s estimates, this will cost him up to $40,000. “I just can’t afford that. This tax is forcing me to close my business.”

Lawmakers should come back to Harrisburg and repeal the excise tax. Any revenue lost could be offset by cutting spending from the $800 million of corporate welfare in the state budget.

Reducing special subsidies to save the livelihood of small business owners like Chris is a practical and moral solution to an unacceptable problem.

Thanks,

Bob Dick
Senior Policy Analyst

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