Credit: Tom Sofield/NewHopeFreePress.com
The Pennsylvania House of Representatives passed a bill to implement a 5 percent gross receipts tax on digital advertising services to fund property tax rebates for older residents.
Sponsored by Rep. Elizabeth Fiedler, a Democrat of Philadelphia, House Bill 1678 passed in a 139-63 vote.
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The measure drew bipartisan support, with 39 Republicans joining the majority of Democrats in favor of the legislation, while only two Democrats voted against it.
The proposal moves to the state Senate for consideration as lawmakers face a deadline at the end of the month to pass a state budget.
The proposed tax is projected to generate between $329 million and $500 million for the 2026–2027 fiscal year, according to estimates from the Independent Fiscal Office.
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Lawmakers said that big tech platforms currently pull in more than $11 billion in revenue from digital advertisements that target Pennsylvania residents.
The legislation would target large multinational companies, including Google, Meta, Amazon, TikTok, and Microsoft, while exempting local news media and broadcast outlets.
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Originally conceived by progressive organizations as a mechanism to help close a looming structural state deficit, the bill was later amended to direct collected revenues to a restricted account within the Property Tax Relief Fund.
The dedicated fund will provide property tax rebates to homeowners who are at least 65 years old, or to households that include a resident over the age of 65. Only one claimant per homestead can receive the rebate each year.
The rebate amount will be determined by calculating the difference between a claimant’s local school real estate taxes in the current fiscal year and the fiscal year in which the claimant, or the resident in their household, turned 64.
If the bill becomes law, claims must be filed directly with the Pennsylvania Department of Revenue.
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Proponents framed the bill as a victory that forces wealthy global tech entities to contribute more to the state while bringing financial relief to senior citizens.
“Plain and simple, this legislation is about requiring big out-of-state corporations profiting off the people of Pennsylvania to pay their fair share in taxes, and to invest in the public services and programs we all count on,” Fiedler said.
Fiedler added that working families are tired of being told there is no funding for schools, healthcare, and transportation while corporations secure record-breaking profits.
House Democratic Majority Leader Matt Bradford, of Montgomery, pointed to the regional impact of major tech firms.
“These are the biggest, most profitable companies that are bringing data centers and all of the challenges to our commonwealth. 100% they should pay their fair share,” Bradford said.
House Minority Leader Jesse Topper, a Republican from Bedford County, said that increasing corporate tax burdens stifles economic growth and could potentially drive businesses away from Pennsylvania, according to reporting from The Center Square – Pennsylvania.
Critics cautioned that the 5 percent tax would likely be passed down to local consumers and the small businesses that rely on purchasing digital ads.
