City raises sales tax on certain retail items

The city is preparing to raise its sales tax from 7 cents to 8 cents on the dollar as part of the city’s effort to balance its budget.

In just a few weeks, Philadelphia shoppers will begin paying more for many goods. The city is preparing to raise its sales tax from 7 cents to 8 cents on the dollar as part of the city’s effort to balance its budget.

Listen:
[audio: 090921lfexempt.mp3]

Most clothing, and most food purchased at grocery stores, are exempt from the tax… but plenty of items are not.

Philadelphia Revenue Commissioner Keith Richardson.

Richardson: Sales tax applies to certain clothing items. For example formal wear and evening attire. A man who purchases a tuxedo that would be taxed compared to buying a suit. For a lady buying bridal accessories or apparel, that is a taxable item. The food that you’re eating at restaurants are taxable.

Retailers and the state both have to make changes to the tax collection system to ensure shoppers are paying the increased sales tax.

The CEO of the Greater Philadelphia Chamber of Commerce says the group supports the sales tax hike, and he’s waiting to see what impact it might have on businesses in the city.

Officials expect the sales tax hike will go into effect in October.