Pennsylvania Governor Proposes Cigar Tax, Again

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Today, Governor Ed Rendell put forth his 2010-11 Budget, his 8th and last budget, -- proposing to spend $29.03 billion, or 4.1 percent over the current fiscal year. The Governor is calling for a massive expansion of the Sales Tax, new business taxes, and a new tax on Marcellus Shale drilling.

"At a time when Pennsylvania and average citizens are attempting to climb their way out of the worst recession since the Great Depression, the Governor's tax and spending proposals are putting more obstacles in our path to prosperity," said Sen. Orie.

Overall, the Governor proposed the following tax measures:

Expanding the Sales Tax to include 74 additional items and services including: basic television, candy/gum, coal, firewood, flags, magazines, personal hygiene products, residential telephone service, and water and sewage services.

A new 5% Natural Gas Severance Tax on a new industry in Pennsylvania, which is creating new jobs and opportunities.

Place a new 30% tax on cigars and smokeless tobacco.

Eliminate the 1% Vendor Sales Tax Discount.

Require the adoption of combined reporting for business taxes.