Pennsylvania considers a 25-cent “package fee” on delivery

As Pennsylvania policymakers seek long-term budget solutions after the coronavirus pandemic, one possibility is to impose a 25-cent tax on Amazon, FedEx, and UPS deliveries.

The proposal is still in its early stages and is seen as a possible way to make up for the transportation funding deficit, which will expand as the state runs out of federal aid due to the pandemic.

Sometimes regarded as an e-commerce convenience fee, the concept of a package tax relies on the idea that the users of the delivery service are the beneficiaries of the transportation infrastructure that enables them to receive the goods. Compared with the shorter shopping distances in local businesses, delivery is also considered an environmental cost.

At the Transportation Revenue Selection Committee meeting last month, state officials discussed some of the implications and possible revenue data surrounding the hypothetical tax.

Jenny Granger, Deputy Secretary-General of Intermodal Transport in Pennsylvania, said: “There are indeed many policy considerations that require a comprehensive review of priorities and priorities, and working with the General Assembly to make this a reality.”

In 2019, Pennsylvania delivered an estimated 554.8 million packages. During the pandemic, this number has risen sharply to approximately 721.5 million in 2020.

“I believe this trend is still going on,” Granger said. “Even if we have lifted the quarantine, I will tell you that I like home delivery. This is not part of it, but I think it reflects a lot of changes in thinking-do I really need to go to the store, or just go online? Order? It has been delivered to my house.”

Granger estimates that the 25-cent parcel tax will bring in 20-250 million U.S. dollars a year in the next few years, which can be used for a variety of transportation needs.

“Did it solve all the traffic problems we encountered? No, absolutely not, but I think again, if some policy considerations and all key principles can be resolved, I think this may be an important source of funding, whether it is for transportation Transportation or freight, highways or local road networks,” Granger said.

Although New York City and Colorado are discussing similar proposals, no other state in the country currently levies a blanket tax. In New York City, the tax package will be used to fund public transportation, while Colorado’s goal is to use the revenue directly for multiple modes of transportation.

Granger admitted that any tax package proposal needs to clarify whether it complies with the constitutional basis for interstate trade regulation. It is also necessary to consider whether such taxes can exempt products such as prescription drugs and food, or whether they can be exempted from shipping to hospitals, schools, non-profit organizations, and religious institutions.

“There are a lot of questions like’the devil is in the details’, if this seems feasible, how will we move forward?” Granger said.

PennDOT reports that this year’s funding shortfall of $8 billion is partly due to a sharp drop in natural gas taxes during the pandemic, although the tax rate is the second highest in the country, at 58.7 cents per gallon. Governor Tom Wolfe and other legislators are in favor of the idea of ??phasing out gasoline taxes in the long run, but officials are looking for alternative short- and long-term solutions. One of the proposals includes a temporary increase in gasoline taxes until such an alternative is determined.

According to reports, parcel tax is one of several ideas that have been put forward in recent months. Reading EagleSome work suggestions include the following options:

• Transfer of $619 million in state police funds from PennDOT’s budget to the state’s general funding budget.

• Increasing registration fees, including the cost of electric vehicles, to raise US$787 million.

• Increase vehicle taxes to raise $1.29 billion.

• Charge drivers based on the number of miles traveled.

• Charge delivery fees to homes and other locations.

As of last year, the Pennsylvania Turnpike Commission’s debt exceeded $14 billion, and it also announced last week Tolls will increase by 5% in 2022.

Critics of Pennsylvania transportation funds have long Diversion towards gas tax From the state’s car license fund, which provides a large part of the Pennsylvania police budget. Otherwise, these funds could have been used to repair roads and structurally defective bridges across the state.

Wolf appointed the Transportation Revenue Selection Committee earlier this year Enrich the proposal and put the country’s funds on the right trackThe tax package may be an unpopular proposal by Pennsylvania residents, but it appears to be one of the ideas the committee will present in a report to Wolfe later this summer.

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