Pennsylvania considers taxing textbooks

A proposed change in Pennsylvania sales tax could save college students a few dollars on… A proposed change in Pennsylvania sales tax could save college students a few dollars on their school supplies and McDonald’s meals – but the tax will hurt students when buying other essentials, like textbooks.

Pennsylvania’s 6 percent sales tax applies to most purchases, but exempts necessities such as unprepared food purchased at a grocery store, apartment rent and utilities. The sales tax in Allegheny County stands at 7 percent and in Philadelphia, it’s 8 percent. Gov. Ed Rendell’s proposed budget would lower the state sales tax to 4 percent, Allegheny County’s sales tax to 5 percent and Philadelphia’s to 6 percent.

State representative Jake Wheatley, D-Hill District, said the house will vote on the change to the fiscal code in June, if it votes at all.

“We have a sales tax that was created in 1960, and most of the things that people were purchasing in 1960 were tangible items,” John Raymond, revenue analyst for Pa. Sen. Jay Costa, D-Forest Hills, said. “But now the economy is different. Now people buy a lot more services, [especially] in America. We purchase the services of a lawyer, or music from the Internet.”

Rendell’s proposition is to do away with 74 of the tax exemptions that currently exist — including the one on utilities — and use the extra revenue for two purposes.

Raymond said the first purpose for this is to reduce the rate on goods from 6 to 4 percent, and the second is to put the money into a special fund which would provide the state government with money when it loses its stimulus bill.

Rendell’s budget still exempts unprepared food, prescription drugs and clothing.

But Rendell also proposes removing a tax exemption on college textbooks. His proposition would add 4 percent to the cost of every textbook students buy.

Pennsylvania is not the first state to consider taxing textbooks. Alabama taxes them — although the Alabama state legislature is considering a bill to remove the tax.

The proposed bill says that “existing law does not address or place limits on the rising prices of college and university textbooks.”

Only nine other states — including Massachusetts, Connecticut and New Jersey — apply a tax exemption to textbooks, according to Barnes & Noble’s website.

Other newly taxed items would include candy and gum, newspapers and magazines, over-the-counter drugstore items, coin-operated vending machines and basic cable television.

This means that, for example, if a student spends $20 per month on candy and gum in Allegheny County, he would pay $21 per month, which is an extra $12 per year.

Pitt students expressed mixed opinions about the proposed sales tax change.

“I would say [the change] would not bother me too much,” Pitt junior Katie Barbera said. “I don’t buy magazines, and I don’t chew gum very much.”

Some students, including Barbera, said the 5 percent increase in the price of certain materials would not make enough of a difference in their budgets to deter them from purchasing certain items.

Others, like junior Lauren Kyle, disagreed.

“I would say that it would bother me a lot, the textbook tax in particular, because I spend so much on them already,” said Kyle.

Kyle thought if a tax were imposed on textbooks, she would consider changing where she buys her books.

Other students said that if a tax were imposed on textbooks, they would be more likely to turn to Amazon or another website for books rather than the University Book Center.

In his annual budget address Feb. 9, Rendell said the state expects to end this fiscal year with a deficit of $525 million, when the original estimate was only $450 million. He hopes legislators will approve the new budget by the time the new fiscal year begins, making it the first time in his eight years as governor that this would happen.

Raymond said Rendell’s sales tax proposition would increase Pennsylvania’s tax revenue by $6 billion, but it would decrease the rate of taxes by one third.

Raymond clarified that the proposed increase is “a long way from law.”