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REALTORS® voice opposition to proposed state sales tax on services

By: Kim Shindle on in  | 

Nearly 100 Pennsylvania REALTORS® resoundingly told state lawmakers that they are against the proposed tax on professional services, including taxes on REALTOR® fees.

PAR President Don Roth speaking in the Capitol Rotunda. Photo credit: Stuart Leask

“This proposed tax on professional services would not only affect consumers and REALTORS® but every profession and service included in the real estate transaction,” said Don Roth, president of the PA Association of REALTORS®. Roth spoke during a press conference held in the Capitol Rotunda in Harrisburg Wednesday afternoon. (View a video clip of President Don Roth’s speech.)

Gov. Ed Rendell’s 2010-2011 proposed budget would reduce the state sales tax to 4 percent but expand it to include REALTOR® fees and 73 other currently exempted items. If enacted, Pennsylvania consumers would have to spend thousands of dollars more to purchase a home since a four-percent tax would also be levied on appraisals, attorney services, credit reports, mortgage originations, home inspections, surveys, title searches, construction, architectural services and site preparation.

Joel Searby, vice president of Strategic Guidance Systems (SGS) of Florida, said the results of a statewide survey conducted revealed that an overwhelming majority of likely voters – 70 percent of those surveyed – oppose the proposed tax on professional services involved in the home-buying and –selling process. 

Fifty percent of those polled disapproved of Gov. Rendell’s proposed 2010-2011 state budget.

Searby said the survey revealed that the proposed budget would be a voting issue in 2010. “When respondents were asked how they would vote if they knew their legislator supported the budget, more than 50 percent said they would be voting for someone new,” Searby added.

Many of the REALTORS® followed the press conference with visits to their legislators, reinforcing the message that the tax on professional services will further hurt the housing recovery in Pennsylvania.

PAR members walking up the Capitol steps. Photo credit: Stuart Leask

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Comments (9)

Comments

  • Harry R. McCarty   March 25, 2010 at 2:16 pm

    Thanks to the many REALTORS who showed up for the Hill Visit. Don Roth is right on. Taxes don’t help many of the citizens of Pennsylvania in a positive way. To tax people only be come poorer. To make home ownersship more difficult to acquire results many times in unhappy people. Further, if we are going to stay in business the only thing business can due is to pass the tax on to comsumers.
    Taxing services in NOT the answer. It would be better to increase the earned income tax so everyone could contribute to the State Budget this way all the legislative member would pay the tax too!

    Reply to Harry R. McCarty
  • Sean H. Fogarty   March 26, 2010 at 9:50 am

    Thank You to All that went yesterday, especially Helen M. and Wendy K.
    It’s hard enough to gain the Consumers Trust and Confidence in us. Now Our Govenor Wants Us, Not Him, to tell the Consumer that the Closing Cost will be even Higher. HAS HE LOST HIS MIND! Eliminate the 2% Transfer Tax then maybe, just maybe, we can work around this Foolish Notion of adding 4% to the cost.
    Sean F.

    Reply to Sean H. Fogarty
  • JOanne Baggott   April 9, 2010 at 11:48 am

    Taxing som eof these real estate realated services will increase the cost of buying and selling a house. Our housing market is already in a slump – we need help – not obstacles to promote home ownership!

    Reply to JOanne Baggott
  • Scott Walley   April 9, 2010 at 2:08 pm

    Between this , the new building codes and rising property taxes, our industry and the home owners in Pennsylvania are going to be in trouble . Vote them out!

    Reply to Scott Walley
  • Darlene Byler   April 9, 2010 at 2:14 pm

    Please do not put a Sales tax on services for real estate related items. The real estate is in trouble now. People can’t afford the prices and costs now and if this added it will increase the cost of a home considerably.

    Reply to Darlene Byler
  • Tom Roth   April 9, 2010 at 3:32 pm

    How would that work? You buy a house and the commission is X%, then at settlement you have a line on the HUD1 for PA Sales Tax? Or would individual brokers take it of the top of any commission paid? Your CAP, Your Royaties, and your Sales Tax?!?
    It is truly amazing that the state would add another item to the already over burdened housing market. FHA tightening requirements for lending, EPA becoming more stringent about re-habbing, Banks dragging their feet on short sales and REO’s. This is a back-door tax to any consumer who uses not only a Realtor but any professional to help them through the maze of beurocracy created by legislators.

    Reply to Tom Roth
  • Peter Ryan   April 10, 2010 at 2:16 pm

    As an experienced Realtor, I have difficulty with the proposed tax on Real Estate Services. Why? Simple- 1)Buyers and sellers already pay transfer tax on each side of every transaction 2)When a newly constructed home is purchased, the associated NEW taxes for the property adds substantially to the tax base.3) Realtors are already taxed on income.4) With the sale or purchase of any home in the state of Pa., the number of individuals and businesses throughout the state benefitting from that transaction is enormous. All of these individuals or businesses pay tax on the income derived from each sale…just a small sampling of this- Realtors’ commission is taxed, transfer tax from both buyer and seller, a home inspector is paid to inspect the home, a lender is called to finance the purchase, a contractor, roofer, electrician, plumber, radon remediation co., decorator, flooring professional, painter, mover, title co., landscape co., might be called to make needed repairs to either sell the home or improve it after purchase. In short, when we begin to add up the incredible impact that the simple (or not so simple, as many people who move learn) act of the sale of a home, the ripple effect for our economy is stunning. Adding more tax to that process is simply not warranted. If any legislator wishes to debate this, I’m available…..

    Reply to Peter Ryan
  • Peggy Gist   April 15, 2010 at 1:41 pm

    Representatives we are begging you to vote NO to this proposed tax that affect the middle income masses. Tax the high end income makers who always find loop holes to avoid paying taxes while the middle class and hard working individuals suffer the blunt force of taxes.

    Stand up and fight American…….PA can not take any additional taxes.

    Reply to Peggy Gist
  • Janice Caputo   June 1, 2010 at 5:30 pm

    I agree, transfer tax is already unfair, especially for people buying in the city! We need to facilitate buying property in difficult to sell areas; thus increasing municipalities & school’s tax revenues because vacant properties are a blight, hazzardous, and further decrease property values in neighborhoods where you want to encourage pride in home onwership and community. Who came up with this lousy idea? We work for free half the time, educating buyers/sellers of realities in the market; our fees are increasing at a time when the market is tighter than ever, how is that fair? Pick on the fat cats for a while and let us do our jobs to help economic recovery!

    Reply to Janice Caputo

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