(The Center Square) – A plan to tax digital advertising for the first time and use the estimated $500 million in new annual revenue to give property tax rebates to seniors won bipartisan, final approval from the Pennsylvania House Tuesday.
“A no-brainer” is how Democratic majority leader Rep. Matt Bradford of Montgomery County described the logic of voting for the bill. “People need economic help,” he said.
The top Republican in the chamber, minority leader Rep. Jesse Topper of Bedford County, disagreed and said the measure would help chase businesses out of the state. Topper said he did not believe state leaders could “tax our way to balanced budgets.”
The bill will now go to the Republican-controlled Senate, where it faces an uncertain future. A spokesperson Democratic Gov. Josh Shapiro said last week the administration is monitoring the progress of the bill.
Its concept expands the existing Gross Receipts Tax to include a 5% levy on digital advertising. One of the most attractive aspects for supporters was the majority of digital ads are handled by massive international technology companies, like Meta and Google.
“Some of the wealthiest corporations in the entire world have gotten a free pass in our state,” said Rep. Elizabeth Fiedler of Philadelphia, the prime sponsor. “We will close a huge loophole and require big tech to pay their fair share.”
A longtime proponent of property tax reduction, Republican Rep. Doyle Heffley of Carbon County, said there were a lot of “issues” in the bill but he would vote for it anyway. His part of the state has a relatively heavy property tax burden.
“This is a step in the right direction,” Heffley said, but it could have gone “much, much farther.”
Republican Rep. Robert Leadbeter of Columbia County said some organizations that would be forced to pay the new levy on digital advertising would be ones that serve seniors. Because of that, Leadbeter said, the bill essentially called for taking money out of one pocket and putting it in another. That, he said, justified a “no” vote.
Topper’s argument likely held sway with many Republicans who believe the state needs to create a more business-friendly climate to stimulate economic growth and reap the resulting increase in tax revenues. Topper said that experience has shown that tax increases placed on big businesses typically get passed down to the consumer.
“It will be no different here,” he said.
Nonetheless, 39 Republicans voted in favor of the measure and 61 were opposed. Two Democrats – Reps. Arvind Venkat of Allegheny County and Manuel Guzman of Berks County – voted against the bill with all other Democrats in favor.
One seat in the 203-seat chamber is vacant. A special election is scheduled for Aug. 18 in the 12th House District in Butler County, where the seat was left vacant by the resignation of former state Rep. Stephanie Scialabba.
Meanwhile, Tuesday was the first day of voting for Rep. George Margetas, who was sworn in near the start of the voting session. Margetas, a Republican, won a special election in May to fill the seat left vacant by the resignation of former Rep. Seth Grove in the 196th House District.
