The state of Pennsylvania is considering a new tax on warehousing that has drawn strong opposition from warehouse logistics providers.
Gov, Tom Wolf (D) wants a 6% sales and use tax on commercial storage services in what he hopes will help close a $3 billion deficit in the state’s 2017-18 budget.
The International Warehouse Logistics Association says the tax would cause an average of $250,000 per warehouse in lost annual revenue, resulting in layoffs and businesses choosing to leave Pennsylvania.
“When looking at the full impact, it’s clear to see that this translates to an actual loss of tax revenue, caused by a loss of economic activity, a loss of population and a loss of income and sales taxes,” says Paul Delp, President of Lansdale Warehouse Co. of Lansdale, PA.
“Our communities will end up with large, empty warehouse buildings that are not leasable, creating real estate taxation issues and revenue issues for local governments and schools,” added Delp, who also serves as President of ACWI.
This isn’t the first time a Pennsylvania governor has sought such a tax. The most recent attempt was in 2010 when Gov. Ed Rendell was foreced to back off after IWLA sponsored a study vividly depicting the negative impact a warehouse tax would have.
IWLA notes that a similar study is currently underway by Penn State University that already estimates implementation of this new tax proposal would result in the loss of 9,000 jobs, plus an additional number of seasonal temp jobs.
A recent KPMG study also shows 90% of the states that considered commercial storage taxes have either backed off the idea or chose to repeal them.