The headline for our profession: the Pennsylvania False Claims Act is not part of this budget.

This proposal, which would have exposed CPAs and other tax preparers to significant new liability, did not advance. The PICPA made this issue a top priority this session, and its exclusion from the final agreement is a direct result of that advocacy. When legislation threatens the profession, sustained pressure from the PICPA and its members is often what keeps it from moving forward, and this is a clear example of that work paying off.

Other outcomes worth noting:

• House Bills 1551 and 1552 would have added new documentation requirements and financial penalties to the sales and use tax refund process, creating real risk for CPAs filing claims on behalf of clients. Their exclusion from the budget means preparers avoid this added burden and liability.
• The Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs saw no changes in this budget. The PICPA sought member input on these issues earlier this year, and we thank everyone who weighed in. That feedback shaped our position and our conversations with legislators.
• The General Assembly also did not take up a digital advertising tax this session. PICPA sought member input on the issue and expressed concerns to legislators that the proposals under consideration conflicted with the principles of sound tax policy.

Why this matters:

In a budget cycle without major tax wins, the value of advocacy often shows up in what doesn't happen. Keeping harmful proposals off the governor's desk protects members just as much as advancing favorable ones, and this budget is a good example of that defense at work.

The budget by the numbers:

• Total General Fund spending: $50.84 billion, a 3.7% increase ($1.82 billion) over the revised FY 2025-26 budget
• This is well below the $53.3 billion plan Gov. Shapiro proposed in February and the House approved in April
• No transfer from the Rainy Day Fund, which holds a balance of $7.74 billion
• No new taxes
• As in recent years, there is no separate Tax Code bill this cycle, though a Fiscal Code was approved

A note for members in Philadelphia: SB 146 also updates how the city calculates net income for the Business Income and Receipts Tax (BIRT), aligning it more closely with state tax law. The bill also establishes a uniform rule for determining where retail sales are sourced for local sales tax purposes in Philadelphia and Allegheny County. Under the new provisions, local sales taxes will generally follow the same sourcing rules used for Pennsylvania's state Sales and Use Tax, creating greater consistency in tax administration.

Join our free webinar on July 22 for a closer look to review the budget in full.

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We will continue tracking implementation of this budget and keep you informed as these provisions take effect.

Thank you for staying engaged, your voice is what makes this advocacy work.