Oppose a Sales Tax on Legal Services

Please oppose a plan that would expand the Pennsylvania Sales Tax to include legal services.

Currently, legal services are exempt from the sales tax in Pennsylvania. However, there is a proposal being discussed in the General Assembly to broaden the application of the sales tax to include many professional services, including most legal services.

The Philadelphia Bar Association believes that it is bad public policy to impose a sales tax on legal services. This is not a tax on attorneys. Rather, it is a tax on the individuals who seek legal help, often at a time when they are most vulnerable and stressed.

The proposed tax would be harmful to individuals, in that many people who are financially struggling may forego hiring an attorney and suffer the consequences inherent with lack of representation.

A sales tax on legal services invades the sanctity of the attorney-client relationship. Confidentiality of client information is at the heart of this relationship. The sales tax being discussed exempts some area of practice while imposing the tax on others. Consequently, a state audit would necessarily require an inquiry into the nature of the representation provided, compromising attorney-client confidentiality and subjecting client information to disclosure.

A sales tax on legal services would also be harmful to Pennsylvania’s law firms, as clients would seek legal representation from firms in the vast majority of states that do not have such a tax. To save clients money, firms that have offices in multiple states will shift legal work to offices outside of Pennsylvania. The tax would also place an administrative burden on Pennsylvania lawyers in charging, accounting for and paying to the Commonwealth sums owed on fees collected from clients.

The Philadelphia Bar Association urges its members to contact their state legislators to discuss with them the negative implications of expanding the sales tax to include legal services. A personal contact, either face-to-face or by telephone, can be highly persuasive. An incisive letter is another effective tool to get your point across. Use the format letter on this page to get started. Be sure to personalize the letter to increase the likelihood that your point of view will be noticed. Take action today on the issues that will make Pennsylvania a better place to live and work.