![]() Taxpayers should keep a close eye on this. Although the new administration may push for new and increased taxes, they’ll have some work to do getting the legislature on board. To sum this up-we could see a whole host of tax reform proposals during the upcoming legislative sessions. ![]() This same bill will likely be reintroduced during the next legislative session. Additionally, even if the current impact fee goes away, two state senators introduced a bill in the last legislative session that would create a new impact fee to generate money for the counties and municipalities. However, it’s possible that the impact fee could remain in place even if a severance tax is enacted, because the legislature could amend the impact-fee law to remove the automatic expiration provision. Because the current impact-fee law automatically expires if a severance tax on gas wells is enacted, many have expressed concerns about how that loss of revenue will impact the affected localities. This contrasts with Pennsylvania’s current “Impact Fee,” which provides revenue directly to counties and municipalities to fund infrastructure improvements and other programs that are necessary because of the increased shale activity. Under Wolf’s plan, revenue raised by the tax would fund education and environmental agencies overseeing gas-extraction activities. One of the major tax items in Wolf’s campaign platform was a 5% severance tax similar to taxes imposed by other gas-rich states. ![]() 1 That said, Pennsylvania still has a Republican-controlled legislature that may not share the same views on tax reform as the governor-elect. If campaign promises are any indication, the governor-elect will likely push for more major tax reform in Pennsylvania, such as: a severance tax combined reporting further addressing the “Delaware loophole” and a progressive personal income tax. For more information on any of these developments, contact one of the authors or the Reed Smith State Tax attorney with whom you usually work.ĭoes New Governor Mean More Tax Reform? In the recent gubernatorial election, challenger Tom Wolf (D) defeated incumbent Governor Tom Corbett (R). ![]() This is a brief update on recent Pennsylvania tax developments. ![]()
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