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The House of Representatives voted Tuesday to tax technology companies that run digital ads in the commonwealth and utilize the revenue to fund property tax relief for seniors.
Independent Tax Office estimates this measure could raise approximately $329 million in fiscal year 2026–2027.
Although many Republicans spoke out against the bill, it ultimately received bipartisan support by a 139-63 vote. Thirty-nine Republicans joined all but two Democrats in supporting her.
The measure would expand the state’s existing 5% gross receipts tax to include revenue earned from digital advertising services provided in Pennsylvania. Many of the country’s largest technology companies, such as Meta and Google, derive most of their revenue from selling targeted advertising.
Bye. Democrats believe a tax on huge tech companies could aid reduce the state’s deficit
It would include an exemption for broadcasting companies and news media.
“We all hear it in our district offices: ‘the cost of everything is too high,’” said the bill’s sponsor, Rep. Elizabeth Fiedler (Philadelphia). “It helps small businesses and those same working people get by on paying their taxes. But some of the richest corporations around the world have been getting a free pass in our state for too long. That’s what this bill is all about.”
The proposal was initially introduced as part of a package of bills pushed by a coalition of progressive organizations called Pennsylvanians for Accountability from Yass, Billionaires and Corporations (PAYBAC).
The other two would close the so-called Delaware loophole, under which companies set up holding companies in Delaware to avoid paying Pennsylvania corporate taxes and collect non-wage income from sources such as mutual funds and stock dividends.
Ultimately, the aim is to shift more of the tax burden to the richest people living and doing business in the bloc, with the digital advertising tax bill specifically targeting large tech companies.
However, the concept of raising taxes has drawn criticism from House Minority Leader Jesse Topper (R-Bedford). He said that while he supports property tax relief for seniors, he believes that raising corporate taxes to fund them will ultimately drive companies out of the Commonwealth and reduce the tax base.
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“If we want to provide seniors with property tax relief, we can do it without adding more taxes,” he said. “We don’t have to look for revenue to get more taxes. We need economic growth in Pennsylvania.”
Other critics warned that the tax on huge tech companies could be passed on to tiny businesses that advertise with them in Pennsylvania.
Debate on the bill comes as lawmakers face a June 30 deadline to present Gov. Josh Shapiro with a state budget for the 2026-2027 fiscal year.
The state currently has a structural deficit, as estimated by the Independent Fiscal Office could rise to $6.7 billion next year if lawmakers pass Shapiro’s proposed budget without creating up-to-date sources of revenue.
Although the digital advertising tax measure was initially considered as a way to offset this deficit along with up-to-date revenues from large companies, it was later changed to support property tax relief for homeowners over the age of 65 or homeowners living with someone over the age of 65.
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According to Rep. Steve Samuelson (D-Northampton), the money collected from the tax will go into a special property tax relief fund. Eligible homeowners could then apply for the rebate.
Asked whether this measure would continue to serve the purpose of closing the deficit. Samuelson told the Capital-Star: “This helps Pennsylvanians. Every homeowner over the age of 65 and every homeowner with someone over the age of 65 in the home will receive a property tax break.”
Asked if she thought tying the digital advertising tax to property tax refunds for seniors was necessary to convince Republicans to vote for the option, Fiedler demurred.
“I think property tax relief for seniors is something that we can see support for across party lines, hopefully in both chambers.” – said Fiedler. “That said, if the Senate wants to come back and talk about other ways to use this money, I think we’re open to having a conversation.”
“We will have to face really difficult budget decisions,” she added. “So I think it’s a smart decision – a creative idea – to bring in revenues and get ahead of them so that we’re ready and don’t have to make some of these terrible choices about cutting programs that people are counting on.”
The digital advertising tax bill will need to pass in the GOP-controlled Senate before it reaches Shapiro’s desk for his signature.
