PA to tax injured workers? Really?

capitolI am sure you will not find too many people in Pennsylvania that will argue
the fact that Pennsylvania needs to overhaul its antiquated school funding scheme, specifically, the reliance upon property taxes to fund public education.  Property tax reform has befuddled and escaped the Pennsylvania General Assembly for years.

I am a property owner, tax payer, and an elected School Board member in Shippensburg.  I get it.  I agree that property tax reform, and more specifically, public school funding, needs overhauled.  No argument from me.  I know in order to do that, taxes must shift elsewhere.  We have to properly and adequately fund out education system.    I am willing to pay my fair share.

Senate Bill 76 was voted out of the Senate Finance Committee last week.  This is the legislative vehicle to attempt property tax reform.   SB 76 expands sales tax to legal services.  Unfortunately, the Legislature also chose to hammer injured workers.  We are serious.  The bill would potentially require an additional 6% sales tax on workers compensation benefits.  Here is how . . .

Often when an employee is injured at work, their claim is denied or their benefits are threatened with modification, suspension, or termination.  The injured worker has to hire an attorney to fight for or protect the benefits afforded to them by the Workers Compensation Act.  It isn’t enough that injured workers have to deal with pain, disability, lack of a pay check, financial disaster, late bills and missed car and house payments, and many times lack of care due to lack of insurance coverage.  From Claim to Decision, an injured worker may have to wait close to a year before receiving ANY benefits.

Once a case is resolved or a Decision is issued in favor of the injured worker, an attorney in Pennsylvania receives a fee of 20% of the benefits due to the injured worker.   If SB 76 is enacted in its current form, the injured worker would have to then pay taxes, of 6% or more, on those workers compensation legal services.  That essentially will lower their recovery even more so.

Sales tax, in its original form in Pennsylvania law, was to tax ‘luxury’ items and services.  Just a simple look at the Merriam-Webster dictionary, I find luxury to be defined as . . .

“a condition or situation of great comfort, ease, and wealth . . . something that is expensive and not necessary . . . an indulgence in something that provides pleasure, satisfaction, or ease”

I am uncertain as to how a work injury is a great comfort, something that is expensive, or an indulgence.  It’s nothing short of preposterous.   Acquiring the services of an attorney to fight for benefits you deserve because you were INJURED ON THE JOB is not INDULGENCE or GREAT COMFORT!  Most people would prefer to not have to deal with an attorney or the legal system.  However, when you are injured, you have to protect your self, your family, and your health.  That is not a luxury, but a necessity.

I encourage you to pick up the phone, mail a letter, or email your State Representative or State Senator and ask them to oppose sales tax on legal services.  Tell them to vote NO on SB 76 or amend the legislation to drop the taxing of legal services.  It’s simply not fair to shift property taxes to people who are trying to protect their legal rights.  Especially to those that are injured.  Tell your Legislators to use common sense.

You can locate your legislators right here.

Mark Buterbaugh

Attorney representing injured workers and Social Security Disability clients in Pennsylvania and Maryland.