With the state budget almost four months late, a new analysis is shedding light on how much the state could get by tinkering with what products are subject to sales tax. The biggest potential cash cow would undoubtedly be the most controversial — taxing the sale of shoes and clothes.

The state Senate last week passed a $47.9 billion plan that would spend $2.35 billion less than a budget proposal approved by the House earlier in the month.

Senate Republicans balked at the House plan, saying that it would require tapping too much into the state’s savings and could lead to tax increases down the road. Democrats, on the other hand, have insisted that the state needs to boost spending to keep pace with rising costs.

Meanwhile, proposals to generate new revenue, including legalizing adult recreational use of marijuana or regulating and taxing skill games, have failed to gain any traction.

This summer, Senate Majority Leader Joe Pittman, R-Indiana, told reporters that reviewing whether to eliminate some of the exemptions from the sales tax was something that should be on the table when trying to settle the budget standoff.

However, there’s been little public debate about what exemptions, if any, could be removed as part of a budget deal.

The only recent legislation calling for expanding the sales tax involved taxing adult content subscriptions and purchases.

The last expansion of the 6% state sales tax happened in 2016 when the state began collecting tax on digital media purchases, including music and books and video streaming.

Act 43 of 2017 requires out-of-state online merchants to collect and remit sales tax to the state.

The Independent Fiscal Office estimates that those two changes generated $500 million in additional revenue.

In 2023-24, Pennsylvania collected $15.6 billion from sales tax, 28% of the tax revenue collected by the state that year. About 45% of the sales tax revenue in Pennsylvania is generated in Pittsburgh and Allegheny County, Philadelphia and the suburban counties in southeastern Pennsylvania.

Thirty other states rely more heavily on sales tax to support their state budgets than Pennsylvania does, the fiscal office’s review found.

Pennsylvania currently doesn’t collect sales tax on groceries, candy and gum, clothing and shoes or non-prescription medication. New Jersey is the only neighboring state that doesn’t tax at least one of those product categories.

Pennsylvania also doesn’t collect sales tax on sports and other live event tickets or amusement park admission or gym memberships or cable bills. Maryland is the only neighboring state that doesn’t tax at least one of those.

In addition, the state doesn’t collect sales tax on parking, rideshare fares, dry cleaning, legal bills, veterinary care or personal care.

Virginia is the only nearby state that doesn’t collect sales tax on at least one of those services.

Of all those categories, taxing clothing and shoes would generate, by far, the most revenue. Pennsylvania is one of just 12 states that don’t tax the sale of clothing or shoes and if the state began to do so, it would add just under $1 billion in revenue a year, the fiscal office’s report found.

Collecting tax on amusement park admission, movie tickets, sporting events and other live events would generate $410 million in new sales tax.

Thirty-five states collect sales tax on non-prescription drugs and taxing that product category would generate $210 million in new revenue.

In its report, the fiscal office said its staff conducted the review as part of the department’s responsibilities to ensure the state has a competitive economic market and a stable budget.