Ordering pizza, watching cable are now more taxing experiences

So you think kicking back with some friends, ordering out some pizza and watching a movie on cable would be great? Well, it just got seven percent better. For the state and city, that is. Philadelphia is also joining in the fun by tacking on an additional one percent sales tax, also effective today. It's enough to make you cry, isn't it? But before grabbing a paper towel to dry that teary eye, note that these are now taxed as well. A wide variety of household paper products have moved from the category of non-taxed essentials to taxed nonessentials under the new law. Grab some toilet paper instead. It isn't taxed. You could pick up a phone to sob to -- or demand more money from -- folks at home. But if it is a long distance call, a sales tax will again be exacted under the new measures. In addition to the sales tax, employees in the state also face a one percent personal income tax increase over last year, which rises to 3.1 percent until next July and then drops to 2.8 percent. According to Purchasing Director Robert Michel, the taxes won't hurt the University itself. The University is sales-tax-exempt as a not-for-profit institution. But looking in your wallet or purse, you may begin to think you are a not-for-profit institution too. "We're going to be rivaling Tax-achusetts here," local Domino's manager Dave McGarvey complained after learning the taxes had passed. Most pizza places in the area have always charged sales tax on pizza -- delivered or not -- because they had eat-in areas and were consequently classified as restaurants. Restaurants are already required to charge sales tax. But in the past, Domino's Pizza, because it only delivers pizza and lacks an eat-in area, could escape from charging sales tax by classifying itself as a bakery, a loophole permitted under the law. Lawmakers countered this tactic by adding a sales tax on delivered baked goods, which primarily includes pizza. The tax issue gets even more complicated when discussing long distance telephone calls. At the University, both offices and on-campus residences receive phone service from the same system, Penntrex. But not being separate won't mean being equal. Offices will not be taxed for long distance phone calls under the University's exemption as a not-for-profit institution. Residences, however, will be taxed, since living on-campus is not directly related to the University's function. Off-campus subscribers to Wade Cablevision will also feel the tax bite if they choose to order channels beyond the basic cable subscription. Wade Assistant General Manager Janine Stewart said the tax would be even harder on low-income families in the area, who she said are major subscribers to premium cable channels. "From what we understand, [sales tax] will be implemented on everything other than our basic service," Stewart said. "We do feel that it's not fair to our subscribers who depend on cable as their main source of entertainment as well as news and other information." Some of the businesses now passing the new taxes on to customers worked actively against them prior to passage. "We opposed the tax," AT&T; spokesperson Nancy Smith said last week. "We thought that it would be bad for the economy in Pennsylvania . . . and we thought it would be detrimental to efforts to bring and keep industry in Pennsylvania." Smith said AT&T; is particularly worried about losing "telecommunications intensive" businesses in the state, and said she had already heard of one business that would fold because of the tax. "It is ultimately the consumer who pays for all these taxes because it gets passed along," Smith added. "We think it's a regressive tax."

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