Nice Post-Gazette editorial opposing one of the most indefensible tax policies on the books in Harrisburg:
When Gov. Tom Corbett announced his $27.1 billion spending plan, one of the smaller proposals dealt with the state’s antiquated vendor sales tax discount. Most taxpayers assume that when they pay an extra six or seven cents in sales tax on each dollar they spend on a taxable product or service that all of it is forwarded to Pennsylvania’s coffers, but that’s not correct. Vendors who collect the tax as required get to keep a small piece of it, a throwback to a time when assessing and forwarding the payments to the state meant keeping a ledger, writing a check and mailing it to Harrisburg.
Those days are long gone, with computerized record-keeping and tax payment systems that make the process much less onerous for business owners, but the vendor discount persists.
Mr. Corbett acknowledged as much in his budget, when he proposed putting a cap on the vendor discount. The governor’s plan would not eliminate it all together, and the change would not affect an estimated 98 percent of the state’s businesses. But by setting a monthly cap of $250 on the discount, the state could realize about $47 million a year.
Only very large retailers with a high volume of sales — for example, the Walmart, Home Depot and Target chains — would be affected by the imposition of a cap.
I would hardly call the policy indefensible. Many businesses spend tens of thousands of dollars on compliance software, and salaries for staff to administer the collection of a tax the state has forced them to collect. A cut of the enormous amount of tax they collect is not indefensible. If the state wants to make a money-grab for an additional $47 million then call it what it is.
I fail to see why the state should pay businesses to comply with that law.