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Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International

Document Type


Publication Date

Fall 2010




University of Pittsburgh




The Sales and Use Tax is an essential part of Pennsylvania’s revenue profile. Not only is it the State’s second largest revenue source, it has historically played a critical role in reducing the volatility of Pennsylvania’s overall tax collections. The sales tax is also critical to the city of Philadelphia, and Allegheny County. During the current economic downturn both the revenue and structural attributes of this levy should be pushing it to the front of the tax policy line.

The two topics that should rest atop Pennsylvania’s tax policy agenda should be: (1) joining the Streamlined Sales Tax initiative and (2) stemming revenue losses from automated sales suppression software (Zappers). The first initiative would yield additional revenue of $220-$384 million (from e-commerce alone); the second effort (based on the author’s estimates) would yield additional $922 million in revenue (in the restaurant industry alone). One of the more attractive aspects of both of these efforts is that neither involves changing rates. Both provide additional revenue primarily by improving enforcement.

This paper is about the threat that Zappers pose to the strength and stability of the sales and use tax, and how Pennsylvania can move against them by borrowing from experiences in other jurisdictions - some international, some domestic. Importantly, one of the places that Pennsylvania can look is to the certification provisions of the SSUTA. It is not necessary to join SSUTA to learn from it - although joining it might not be such a bad idea eventually.

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