Pa. House passes bill eliminating taxes on cell phone service

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Pa. House passes bill eliminating taxes on cell phone service
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The exemption would go into effect Jan. 1, 2024 or within 90 days of the bill’s passage, whichever is later.

The Pennsylvania House unanimously passed a bill Tuesday eliminating taxes on cell phone service, an initiative requested by Gov. Josh Shapiro in his budget proposal earlier this year.

Although Republicans had earlier signaled opposition to Democrats’ tax-cutting measures more broadly – fearing they would put the state into financial red ink – the cell phone tax itself proved Tuesday to be less controversial, with all 101 House Republicans and all 102 Democrats in support. The bill exempts cell phone service from the state’s 6% sales tax as well as the 5% gross receipts tax. The exemption would go into effect on Jan. 1, 2024, or within 90 days of the bill’s passage, whichever is later.

Some Republicans observed that these fees are not always passed entirely onto consumers and that the impact, anecdotally, might be only a few dollars per person. Democrats argued the break was a worthy one, even if small, and one that acknowledges that cell service is an essential item that the state should not tax, similar to exemptions for food and clothing.

The exemption would reduce state revenues by $62 million for the 2023-24 budget, assuming the legislation is enacted partway through the fiscal cycle, according to a House appropriations staff note. That impact would rise to nearly $90 million in foregone revenue in the following fiscal year.If you purchase a product or register for an account through one of the links on our site, we may receive compensation.

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