(Central Square) – Less than a month before the deadline to finalize the state budget with a deficit of approximately $5 billion, a potential new source of revenue for Pennsylvania was implemented by Democrats in the House of Representatives: taxing digital advertising.
On Wednesday, a Democrat-led committee approved just such a bill, with some members saying it could generate more than $500 million in new tax revenue a year. The vote took place 27 days before the June 30 budget deadline.
It was not immediately clear how the two most critical parties in the budget process – Democratic Governor Josh Shapiro and republican Senate Majority Leader Joe Pittman from Indiana County – was considering the idea of expanding the gross receipts tax category to include digital advertising.
When asked what the governor thought about the expansion, the press secretary Rosie Lapowska on Friday he wrote: “We are monitoring the bill during the legislative process.” Asked for reaction to the House Finance Committee’s vote to approve the expansion, Pittman emailed a statement saying that if the full, Democratic-controlled House passes the measure and sends it to the Republican-controlled Senate, “we will of course look at it.”
The committee voted along party lines 14 to 12, with all Democrats in favor and all Republicans opposed.
According to the committee chairman, the proposed amendments to the bill will probably be considered by the full House on Monday Representative Steve SamuelsonNorthampton County Democrat. He said it was possible that the final vote in the House would take place later this week.
“These revenues will be paid by some of the largest corporations in America,” Samuelson said Friday. He said Google and Meta had combined digital advertising revenues in 2025 that far exceeded Pennsylvania’s overall budget of $50.1 billion.
The gross receipts tax has been in effect in this state for over a century. Its current reach includes electrical companies, telecommunications, transportation and private bankers. Some high-profile categories subject to a 5% tax rate and a bill submitted to the Finance Committee proposed this rate for digital advertising.
“Megacorporations like Google, Meta, Amazon, and Microsoft maximize profits by harvesting our private data in order to sell us ads: banners on news sites, artificially boosting search results, and full-screen pop-ups. These ads not only make our Internet experience more difficult, but they are also tax-free” – bill sponsor, Democratic Party Representative Elżbieta Fiedler of Philadelphia, the memo said.
Samuelson told the committee meeting that digital advertising revenues nationwide were $258 billion in 2024 and $294 billion in 2025. Of that total, Pennsylvania likely had about $11.8 billion, Samuelson said, pointing out that revenue from the 5% tax would be more than $500 million.
Another Democrat, Rep. Rick Krajewski from Philadelphia stated that the Internet has changed.
“It’s become this digital playground where these huge companies just devote our time and attention. We’ve all been on your phone, trying to Google something, trying to read an article, and you’re just inundated with these ads,” he said.
Republicans didn’t like this idea for many reasons. Rep. Leslie Rossi Westmoreland County said it would hurt tiny businesses and consumers would pay for the increased taxes.
The top Republican on the committee, Rep. Keith Greiner of Lancaster County, said he believed the bill was unconstitutional. He expressed an “anti-business attitude” that Greiner said “must end here in Pennsylvania.”
Ford Turner is a Pennsylvania reporter for The Center Square
