I am writing to invite you to cosponsor legislation that modernizes our state sales tax collection system while providing dedicated support to our public pension funds. This legislation will provide ongoing fiscal relief to schools by reducing their pension contributions which will result in property tax reductions statewide. 

This bill updates the state sales tax rounding formula from a one-cent (penny) rounding method to a five-cent (nickel) rounding method. Under this approach, the total sales tax calculated at the point of sale would be rounded to the nearest nickel rather than the nearest penny.

Importantly, this change offers practical relief to Pennsylvania businesses that increasingly face challenges accessing pennies for cash transactions. As penny circulation declines and financial institutions limit coin distribution, retailers are left to absorb rounding inconsistencies or manage additional administrative burdens. Aligning the state sales tax rounding method with a nickel standard reflects current economic realities and simplifies day-to-day operations for businesses across the Commonwealth.

Any incremental revenue generated as a result of this rounding adjustment would be deposited directly into Public School Employees’ Retirement System (PSERS). These funds would be dedicated exclusively to strengthening the long-term fiscal health of our pension systems by paying down the accrued liability which stands at over $40 billion. Additionally, every dollar contributed through this legislation will offset funds currently generated by property taxes, which are the primary source of finance for schools and, by extension, the pension system. This strategic realignment ensures that schools receive consistent financial support while reducing the pressure on property tax revenues.

This proposal does not increase the sales tax rate. Instead, it makes a minor structural adjustment which results in a consistent, dedicated revenue stream to support retirement security for our educators while easing compliance burdens on Pennsylvania employers.

By modernizing our tax collection process, we can support businesses, improve administrative efficiency, and make meaningful progress toward pension stability without imposing broad-based tax increases.

Please join me in cosponsoring this practical and fiscally responsible measure. If you have any questions or would like additional information, please contact my office.