HARRISBURG – In an effort to ease the tax burden for hardworking Pennsylvania families, Rep. Ryan Mackenzie (R-Lehigh) today unveiled a series of tax cut proposals at a Capitol press conference in Harrisburg. He was joined by some of the prime co-sponsors of the “Pennsylvania Families Tax Relief” measures.
“This legislation is designed to ease the economic struggles we are currently experiencing during these inflationary times by providing reductions in various state taxes placed on families,” said Mackenzie. “Ranging from cutting taxes on energy and frequent family purchases such as pet food and toys to reducing property taxes and cell phone bills, our proposals are meant to serve as a menu of options as we begin the process of negotiating the 2023-24 state budget.”
Mackenzie worked with the Appropriations Committee to determine the estimated savings the proposals would provide. The estimates currently available total more than $2.2 billion and are indicated in the bill listing below.
The Pennsylvania Families Tax Relief proposals are as follows.
• Bill would provide several permanent exemptions from the Sales and Use Tax (SUT) which are intended to help families reduce costs for their small children. The exemptions would include children’s and library books, toys, cribs and strollers, and youth sports equipment.
• Bill would provide tax holidays to help reduce burdens when families are making improvements to their homes or getting ready to send their children back to school through temporary relief from the SUT. The tax holidays would include Energy Star appliance for one year, personal property for disaster preparedness and impact resistant doors and windows for one year, tools and home improvement equipment for one week, and back-to-school supplies for two weeks.
• Bill would provide a permanent exemption from the Gross Receipts Tax (GRT) levied on electric bills. Estimated annual savings: $510 million.
• Bill would provide a permanent exemption from the SUT levied on pet food.
• Bill would provide a permanent exemption from the SUT and GRT levied on cell phone bills. Estimated annual savings: $317 million.
• Bill would increase funding for the homestead/farmstead exclusion by redirecting all revenue generated from gaming that is designated for the General Fund to be used for the exclusion program. Estimated annual savings: $379 million.
• Bill would reduce the PIT from 3.07% to 2.99% over a two-year period. Estimated annual savings: $500 million.
• Bill would provide a permanent exclusion to volunteer firefighters and emergency medical services personnel from the SUT for protective equipment purchases.
• Bill would reduce the Inheritance Tax for direct descendants and siblings from the current 4.5% and 12% to align with the PIT. Estimated annual savings: $440 million.
• Bill would increase Pennsylvania’s Child and Dependent Care Tax Credit to match the federal credit of $3,000 for one qualifying individual and $6,000 for two more qualifying individuals over a three-year period. Estimated annual savings: $85 million.
Mackenzie pointed to a new report from the Independent Fiscal Office (IFO) comparing the tax burdens in all 50 states that ranked Pennsylvania 21st in total taxes, including the PIT, SUT, and property taxes. The ranking is based on the ratio of total taxes to personal income. Pennsylvania’s ratio was 10.08%.
“The IFO study shows the Commonwealth can do better in providing tax relief for families who may be having trouble making ends meet,” Mackenzie noted. “I look forward to consideration of the bills by the General Assembly. We don’t expect all of them to be enacted immediately, but simply wanted to offer some reasonable recommendations that would improve the bottom line for many Pennsylvania families.”
Mackenzie is currently circulating co-sponsorship memos seeking bipartisan support for the legislation, which will be introduced in the coming days.
Representative Ryan Mackenzie
187th Legislative District
Pennsylvania House of Representatives