Philadelphia's Sales Tax Hike, to 8 Percent, Will Begin October 8th
by KYW's Tony Romeo
State and city officials confirm that the City of Philadelphia’s new sales tax rate of eight percent will kick in on October 8th.
Janel Miller, spokeswoman for the Pennsylvania Department of Revenue, says the agency will start getting the word out quickly:
“The department will begin to send letters in the coming days to all sales tax licensees in Philadelphia, to notify them of this change. What we’re really trying to do is to encourage retailers to begin updating their cash registers and their accounting systems so that they can begin collecting the sales tax at a higher rate on October 8th.”
Miller also says the state is working on updating its online and telephone filing systems to be ready on October 8th.
And noting that the tax is officially called the “sales, use, and hotel occupancy tax,” Miller also notes that while the sales tax rate will go to 8 percent, the hotel tax portion will remain at 7 percent.
KYW's Mike Dunn reports that the Philadelphia sales tax hike is temporary, according to the legislation, lasting five years. It will bring in $580 million over the five years, closing most of the city's anticipated $700-million, five-year deficit -- that's roughly $10 million a month.
City officials had hoped for an August 1st start date and have already made some budget cuts, including layoffs, because of the more than $20 million in revenue lost due to the delayed implementation.
Still, Mayor Nutter's finance director Rob DuBow says the administration is pleased that the state is moving ahead to allow the tax increase at the earliest date allowed by the legislation:
"It means that over the next five years we'll get roughly $580 million. And if we hadn't gotten that money, we'd have had to make draconian cuts to our budget that would have affected virtually every service we provide."