What are the burdens imposed by PAs Sales and Use Tax on different types of taxpayers?
Tax “burden” is the tax “rate” times the tax “base” – the income, assets, items or services that are taxed. It’s a simple calculation. What’s included and excluded from the tax base, however, is where matters get interesting. Pennsylvania’s sales and use taxes are no exception. Pennsylvania levies its sales and use taxes at a statewide rate of 6%. People in Allegheny and Philadelphia counties pay an additional 1% that’s retained locally. IssuesPA found that Pennsylvania’s 6% is about average when compared to other states imposing sales and use taxes. But Pennsylvania’s sales tax base – the items and services taxed – is relatively small. The notable exclusions are most food and clothing. Pennsylvania is one of several states that doesn’t tax most food sold in grocery stores and one of only a few states that generally exempts clothing. Other major exemptions include most services, prescriptions and other drugs, and materials, machinery and other items used in manufacturing. How does Penn
