HARRISBURG – Legislation to provide meaningful tax relief for Pennsylvania’s small businesses by restoring the Sales and Use Tax Vendor Discount was approved today by the Senate Finance Committee, according to the measure’s sponsor, Sen. Kristin Phillips-Hill (R-York).
Senate Bill 473 would lift the current cap on the discount businesses receive for timely collecting and remitting state sales tax, a change that would reduce administrative burdens and support local job creators.
“Small businesses serve as the backbone of our local communities, and they should not be penalized for doing the state’s work in collecting and remitting sales tax,” Phillips-Hill said. “This legislation restores fairness and ensures we provide real relief to small businesses that have faced enormous cost pressures, especially since the COVID-19 pandemic.”
Prior to 2016, Pennsylvania businesses that submitted sales tax on time received a vendor discount equal to one percent of the amount collected, with no cap. That discount was later limited to just $300 per month, regardless of the size or scope of the business.
Phillips-Hill’s legislation would eliminate the cap, once again allowing businesses to receive the full one percent discount as originally intended. This would help offset the cost of compliance, including transaction fees, bookkeeping, and payment processing costs.
“Increasing costs for fuel, labor, rent, and supplies continue to strain small businesses across the commonwealth,” Phillips-Hill added. “This legislation sends a strong message that Pennsylvania values our small businesses and wants to remain competitive with neighboring states.”
The bill now moves to the full Senate for consideration.