Electricity deregulation cuts tax revenue in Pa.

    Call it a parting gift of electricity deregulation.

    A little-known Pennsylvania tax is seeing a shortfall for the second year in a row.

    Last year marked the first time customers could shop around for alternative electricity providers. Deregulation introduced a number of companies to the state’s tax rolls, but with their historically narrow profit margins, the amount of taxes they had to pay was low last year and will be low again this year.

    State budget secretary Charles Zogby explained another reason for the shortfall by holding up a smartphone.

    “These phones — the data plans that we all now enjoy on our phones that don’t have the same tax coverage as it used to,” Zogby said. “That’s leading to an erosion of revenues, so we are looking at a shortfall.”

    Federal law prohibits the taxation of Internet access and, therefore, of phone data plans.

    The resulting revenue gap is expected to be about $70 million this year.

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