State takes in more revenue than expected in February  

Revenue Secretary Dan Hassell reported Tuesday that Pennsylvania collected $2.4 billion in general fund revenue last month, 6.8% more than expected. 

General fund collections are $28.6 billion so far this fiscal year, 7.5% above estimate. 

Some highlights from February: 

  • Sales tax receipts totaled $935.6 million. Year-to-date sales tax collections, at $9.1 billion, are 6.5% more than anticipated.
  • Personal income tax revenue was $1 billion. Year-to-date PIT collections are $9.7 billion, 5.8% more than expected.
  • Corporation tax revenue came in at $136.1 million. Year-to-date collections in this category total $2.8 billion, 28.6% above estimate.
  • Inheritance tax revenue was $116.1 million, bringing the year-to-date total to $1 billion. That is 9.9% more than anticipated.
  • Realty transfer tax revenue was $58.5 million. The fiscal-year total of $549.5 million is 20.2% above estimate.

Other general fund tax revenue, including cigarette, malt beverage, liquor and gaming taxes, totaled $136.6 million for February. The year-to-date figure of $1.3 billion is 1.9% more than expected. 

Non-tax revenue was $18.9 million for the month, bringing the year-to-date total to $4.2 billion, which is 2.1% above estimate. 

Also, the Motor License Fund received $197.0 million in February, $24.8 million below estimate. Fiscal year-to-date collections for the fund – which include gas and diesel taxes, as well as other license, fine and fee revenues – total $1.8 billion, which is 2% more than anticipated. 

Pennsylvania gaming industry reports revenue for January 2022 

Pennsylvania’s gaming and fantasy contests brought in over $393 million in revenue in January 2022, a 26% increase over January 2021. 

The Pennsylvania Gaming Control Board reported the combined total revenue generated from all forms of gaming in January 2021 last week. 

The report includes a list of Pennsylvania casinos and their revenue in January. It also compares those earnings with January 2021. 

Casinos listed in the report include Hollywood Casino at Penn National in Dauphin County, which had a total revenue of $57.2 million in January 2022 and $43.5 million in January 2021—a change of 31.36%. 

Wind Creek Bethlehem brought in a total revenue of $38.4 million last month compared to $26.3 million in January 2021- a jump of 46.17%. 

Others included Hollywood Casino York, which brought in $6.6 million last month and had no recorded revenue in January 2021 and Hollywood Casino Morgantown, which saw a 965.71% increase from $414,300 to $4.4 million. 

The Pennsylvania Gaming Control Board also reported record-breaking revenue from Internet Casino Type Gaming of $108.3 million—eclipsing October 2021’s previous record of $102.8 million. 

Fantasy Contests, which include betting on platforms such as DraftKings, FanDuel and Underdog Sports, made $2.8 million in revenue in January. 

Pennsylvania’s land-based casino industry is currently made up of six racetrack casinos, five stand-alone casinos, two resort casinos and three mini casinos. Two additional mini casinos are planned for completion in the coming years. 

Hershey Co. reports $8.97 billion in net sales for 2021 

The Hershey Co. reported consolidated net sales of more than $8.97 billion in 2021, an increase of 10.1% from the year before. 

“In 2021, we delivered a record year of production and double-digit sales and earnings growth, with a strong finish and momentum heading into 2022,” Hershey’s president and CEO, Michele Buck, said in a release. “While the environment remains volatile, we are confident in our ability to continue to respond to the changes in the world around us and deliver another year of advantaged performance in 2022.” 

The fourth-quarter 2021 operating profit of $459.2 million was up 13.3% from the fourth quarter of 2020, with price realization gains and reduced levels of advertising the catalysts. 

North America confectionary net sales rose 4.9% in the quarter while North America net sales of salty snacks jumped 38.9%. International market net sales grew slightly, inching up 1.7%. 

Hershey projects net sales growth of 8% to 10% in 2022, spurred by list price increases across the board. Capital expenditures of approximately $550 million to $600 million are also anticipated, the release added, “driven by key strategic initiatives including expanding the agility and capacity of the company’s supply chain and building digital infrastructure across the enterprise.” 

Rising prices, the release added, should partially offset investments in labor; higher logistics costs; and raw material inflation. 

Pennsylvania gaming industry sees record revenue for 2021 

Legalized gaming in Pennsylvania had a record year in 2021, with the Pennsylvania Gaming Control Board reporting revenue increases in nearly every sector of the industry. 

For the year, the combined revenue of slot machines, table games, sports wagering, iGaming, video gaming terminals (VGTs) and fantasy contests totaled $4.7 billion compared to $2.7 billion in 2020. This also resulted in record tax revenue production from gaming of more than $1.93 billion. 

The Board did note that the significant year-over-year increase in gaming revenue was impacted by closures and safety measures at casinos related to COVID-19 during 2020. Total closure days in 2020 were 1,473 compared to 44 days in 2021. 

Statewide, slots were up 68.71% to $2.3 billion. Table games were up 83.4% over 2020, taking in $925 million. 

2021 revenue from sports wagering was $340 million, a 79.29% increase in revenue when compared to the $190 million generated in 2020. Sports wagering handle, the amount wagered through both retail and online, was $6.55 billion, an 83% increase over 2020’s handle of $3.58 billion. 

2021 revenue from fantasy contests was $29.3 million, a 38.54% increase in revenue when compared to the $21.2 million generated in 2020. 

2021 revenue for iGaming was $1.1 billion an 96.7% increase in revenue when compared to the $566 million generated in 2020. At the end of 2021 there were 10 iGaming certificate holders in Pennsylvania. 

While a smaller source of revenue, video game terminals, found in truck stops, did have a significant increase in 2021. 

2021 revenue for VGTs at Truck Stops was $40 million a 139% increase in revenue when compared to the $17 million generated in 2010. By the end of the year there were 60 VGT facilities in Pennsylvania. 

PA Senate passes bill allowing businesses a higher tax deduction on new equipment 

A bill that would allow Pennsylvania businesses to claim tax deductions of up to $1.05 million for the purchase of new equipment passed the state Senate in a 31 to 19 vote and is now headed to the House. 

Senate Bill 349 calls for the removal of a limit on Pennsylvania S corporations, partnerships and individuals that limits the amount to $25,000 annually for new equipment, software and vehicles. 

“The increase in the deduction found in Senate Bill 349 is not a tax credit, but simply allows a tax deduction earlier in the useful life of depreciable assets,” said Sen. Scott Hutchinson, R-Venango, chair of the Senate Finance Committee and the prime sponsor on the bill. “This overdue change is an incentive to encourage businesses to buy equipment and to invest, which promotes job growth in Pennsylvania.” 

The legislation brings Pennsylvania small businesses in line with the state’s C corporations, which could already use the deductions as part of section 179 of the Internal Revenue Code of 1986. Pennsylvania’s personal income tax laws had limited other businesses to that $25,000 deduction, said Hutchinson. 

If passed by the house, the bill will provide a boost to the state’s small and independent businesses following 18 months of uncertainty and restrictions during the pandemic, said Greg Moreland, state director of the National Federation of Independent Businesses Pennsylvania. 

“This legislation mimics parts of the federal Tax Cuts and Jobs Act, which allows full expensing up to $1,050,000 for the purchase of new equipment, but at the state tax level,” said Moreland. “Prior to the pandemic we saw how federal tax code changes helped drive business growth around the country, and if SB 349 becomes state law, small businesses will be better positioned to invest, grow, hire, and drive Pennsylvania’s economic recovery.” 

The legislation is part of a three-bill Small Business Reform Package that includes Senate Bills 347, 348 and 349. 

SB 347, introduced by Sen. John DiSanto, R-Dauphin and Perry, would allow for tax-deferral when property is exchanged for similar property, a long-standing federal provision available in every state in some form except for Pennsylvania, DiSanto wrote in a memorandum for the bill. 

SB 348, introduced by Sen. Judy Ward, R- Blair, Cumberland, Franklin, Fulton, Huntingdon,  would allow small businesses to use the Net Operating Loss deduction. 

Both bills have yet to be passed in the Senate. 

“The passage of SB 349 is the first step in helping advance a small business tax package to help employers recover from the COVID-19 pandemic and mandated shutdowns by bringing Pennsylvania tax law in-line with federal tax deduction law,” said Senate Majority Leader Kim Ward, R-Westmoreland. 

Ahold, parent of The Giant Company, faces $500k lien

Ahold USA Holdings, the parent company for Carlisle-based The Giant Company, has been ordered to pay a settlement of more than $546,000 for allegedly failing to pay a series of taxes in 2015 and 2019.

The Pennsylvania Department of Revenue filed a lien against the Quincy, Massachusetts-based company in the Cumberland County Prothonotary’s office on May 18, 2021. The lien alleges the company owes the state more than $44,500 from 2015, and $492,000 from 2019, with interest included.

A variety of events could have triggered a lien to be filed for 2015 and 2019 taxes including a recent tax audit covering multiple years, according to a spokesperson for the department. The lien may also have been filed by the department following an appeal of an audit assessment by Ahold.

The state Department of Revenue declined to comment on the lien and Ahold was not available for comment.

Ahold Delhaize operates in the United States, The Netherlands, Belgium, Central and South Eastern Europe and Indonesia.

In the U.S. it parents supermarket companies such as Giant and The Giant Company, Hannaford, Freshdirect and Food Lion.