PRINTER'S NO. 38
No. 36 Special Session No. 1 of 2005
INTRODUCED BY RUBLEY, BAKER, BENNINGHOFF, CALTAGIRONE, CAPPELLI,
CAUSER, DeWEESE, DIVEN, FREEMAN, GINGRICH, GRUCELA, HANNA,
HARPER, HARRIS, HERSHEY, HUTCHINSON, KILLION, LEH, MARKOSEK,
McGILL, McILHATTAN, S. MILLER, MUNDY, RAPP, ROBERTS, SANTONI,
SATHER, SCAVELLO, B. SMITH, SONNEY, STEIL, R. STEVENSON,
STURLA, E. Z. TAYLOR, THOMAS, TIGUE, TRUE, WILT AND YUDICHAK,
OCTOBER 21, 2005
REFERRED TO COMMITTEE ON FINANCE, OCTOBER 21, 2005
AN ACT
1 Authorizing counties to impose sales and use, personal income or
2 earned income and net profits taxes; and providing for the
3 levying, assessment and collection of taxes and for the
4 powers and duties of the Department of Community and Economic
5 Development or any successor agency, the Department of
6 Revenue and the State Treasurer.
7 TABLE OF CONTENTS
8 Chapter 1. General Provisions
9 Section 101. Short title.
10 Section 102. Definitions.
11 Section 103. Scope.
12 Section 104. Preemption.
13 Section 105. Rates of taxation in home rule counties.
14 Chapter 3. Subjects of Taxation
15 Subchapter A. Tax Authorization
16 Section 301. General tax authorization.
17 Section 302. Continuity of tax.
1 Section 303. Election to participate under act.
2 Section 304. Local tax study commission.
3 Subchapter B. County Sales and Use Tax
4 Section 311. Construction.
5 Section 312. Imposition.
6 Section 313. Situs.
7 Section 314. Licenses.
8 Section 315. Rules and regulations; collection costs.
9 Section 316. Procedure and administration.
10 Section 317. County sales and use tax funds.
11 Section 318. Disbursements.
12 Section 319. Adoption of municipal ordinances and school
13 district petitions.
14 Section 320. Allocations and qualifications.
15 Subchapter C. Personal Income Tax
16 Section 321. Construction.
17 Section 322. Personal income tax.
18 Section 323. Collections.
19 Section 324. Rules and regulations; collection costs.
20 Section 325. Procedure and administration.
21 Section 326. Local personal income tax funds.
22 Section 327. Disbursements.
23 Subchapter D. Earned Income and Net Profits Tax
24 Section 331. Earned income and net profits tax.
25 Section 332. Collections.
26 Section 333. Rules and regulations.
27 Section 334. Procedure and administration.
28 Chapter 5. Credits, Exemptions and Deferrals
29 Section 501. Credits.
30 Section 502. Low-income tax provisions.
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1 Section 503. Regulations.
2 Chapter 7. Disposition of Tax Revenues
3 Section 701. Sales tax revenues.
4 Section 702. Personal income tax revenues.
5 Section 703. Revenue limitation exceptions.
6 Chapter 9. Register for Certain Taxes
7 Section 901. Definitions.
8 Section 902. Register for taxes under this act.
9 Section 903. Information for register.
10 Section 904. Availability and effective period of register.
11 Section 905. Effect of nonfiling.
12 Section 906. Effect of chapter on liability of taxpayer.
13 Chapter 13. Miscellaneous Provisions
14 Section 1301. Effective date.
15 The General Assembly of the Commonwealth of Pennsylvania
16 hereby enacts as follows:
17 CHAPTER 1
18 GENERAL PROVISIONS
19 Section 101. Short title.
20 This act shall be known and may be cited as the Optional
21 County Tax Reform Act.
22 Section 102. Definitions.
23 The following words and phrases when used in this act shall
24 have the meanings given to them in this section unless the
25 context clearly indicates otherwise:
26 "Board of county commissioners." Includes the successor in
27 function to the board of county commissioners in a county which
28 has adopted a home rule charter under the provisions 53 Pa.C.S.
29 Pt. III Subpt. E (relating to home rule and optional plan
30 government), but does not include the city council of a city of
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1 the first class or the board of county commissioners of a county
2 of the second class.
3 "Classes of income." The classes of income set forth in
4 section 303 of the act of March 4, 1971 (P.L.6, No.2), known as
5 the Tax Reform Code of 1971.
6 "Compensation." As defined in section 301 of the act of
7 March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
8 1971.
9 "County." A county-level municipality within this
10 Commonwealth, regardless of classification. The term includes a
11 county which has adopted a home rule charter or optional plan of
12 government under the provisions of 53 Pa.C.S. Pt. III Subpt. E
13 (relating to home rule and optional plan government). The term
14 does not include a county of the first class or a county of the
15 second class.
16 "Current year." The calendar year or fiscal year for which
17 the tax is levied.
18 "Department." The Department of Revenue of the Commonwealth.
19 "Domicile." As defined in section 13 of the act of December
20 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling
21 Act.
22 "Earned income." The classes of income defined as "earned
23 income" in section 13 of the act of December 31, 1965 (P.L.1257,
24 No.511), known as The Local Tax Enabling Act.
25 "Employer." As defined in section 301 of the act of March 4,
26 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
27 "Governing body." The board of county commissioners,
28 including the successor in function to the board of county
29 commissioners in a county which has adopted a home rule charter
30 under the provisions of 53 Pa. C. S. Pt. III Subpt. E (relating
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1 to home rule and optional plan government). The term does not
2 include the board of the county council of a county of the
3 second class.
4 "Homestead." As defined in 53 Pa.C.S. § 8401 (relating to
5 definitions).
6 "Individual." As defined in section 301 of the act of March
7 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
8 "Local Tax Enabling Act." The act of December 31, 1965
9 (P.L.1257, No.511), known as The Local Tax Enabling Act.
10 "Municipality." A city of the second class, city of the
11 second class A, city of the third class, borough, incorporated
12 town, township of the first class, township of the second class,
13 home rule municipality, optional plan municipality, optional
14 form municipality or similar general purpose unit of government
15 which may after the effective date of this act be established by
16 statute, except a city of the first class.
17 "Nonresident." An individual domiciled outside the
18 municipality.
19 "Ordinance." Includes a resolution.
20 "Personal income." The classes of income enumerated in
21 section 303 of the act of March 4, 1971 (P.L.6, No.2), known as
22 the Tax Reform Code of 1971, and upon which is imposed a
23 personal income tax by the Commonwealth.
24 "Preceding year." The calendar year or fiscal year before
25 the current year.
26 "Register." The register provided for in Chapter 9 (relating
27 to register for certain taxes).
28 "School district." A school district of the first class A,
29 second class, third class or fourth class, including any
30 independent school district.
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1 "Succeeding year." The calendar year or fiscal year
2 following the current year.
3 "Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
4 known as the Tax Reform Code of 1971.
5 "Taxpayer." An individual required under this act to file a
6 tax return or to pay a tax.
7 Section 103. Scope.
8 It is the intent of this act to confer upon each county the
9 power to levy, assess and collect taxes upon the subjects of
10 taxation set forth in this act.
11 Section 104. Preemption.
12 No act of the General Assembly in effect prior to or after
13 the effective date of this act shall vacate or preempt any
14 ordinance passed or adopted under the authority of this act or
15 any other act providing authority for the imposition of a tax by
16 a county, unless the act of the General Assembly expressly
17 vacates or preempts the authority to pass or adopt such
18 ordinances.
19 Section 105. Rates of taxation in home rule counties.
20 A home rule county may not fix the rate of taxation for the
21 subjects of taxation authorized under Chapter 3 (relating to
22 subjects of taxation) in excess of the rates fixed in Chapter 3.
23 CHAPTER 3
24 SUBJECTS OF TAXATION
25 SUBCHAPTER A
26 TAX AUTHORIZATION
27 Section 301. General tax authorization.
28 (a) General rule.--Subject to section 303 (relating to
29 election to participate under act) and except as provided in
30 subsection (b), a county shall have the power and may by
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1 ordinance levy, assess and collect or provide for the levying,
2 assessment and collection of taxes on the sale or use of
3 tangible personal property and services and the occupancy of a
4 hotel room at a rate of 1%, on the personal income of resident
5 taxpayers up to a maximum rate of 0.5% in increments of 0.25% or
6 on the earned income of resident taxpayers up to a maximum rate
7 of 0.5% in increments of 0.25% for general revenue purposes as
8 it shall determine on any or all of the subjects of taxation set
9 forth in this act within the geographical limits of the county.
10 (b) Exclusions.--No county which levies a tax authorized by
11 this act shall have any power or authority to levy, assess or
12 collect:
13 (1) A tax based upon a flat rate or on a millage rate on
14 an assessed valuation of a particular trade, occupation or
15 profession, commonly known as an occupation tax.
16 (2) A per capita, poll, residence or similar head tax.
17 (3) The intangible personal property tax under the act
18 of June 17, 1913 (P.L.507, No.335), referred to as the
19 Intangible Personal Property Tax Law.
20 Section 302. Continuity of tax.
21 A tax levied under the provisions of this act shall continue
22 in force on a calendar year basis, as the case may be, without
23 annual reenactment unless the rate of tax is increased or the
24 tax is subsequently repealed.
25 Section 303. Election to participate under act.
26 (a) General rule.--
27 (1) A governing body which desires to participate under
28 the provisions of this act shall make that determination by
29 using the procedures set forth in subsection (b).
30 (2) A governing body after making an election to
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1 participate under this act may, after a period of at least
2 three full calendar years of participation, elect, under the
3 provisions of subsection (b), to cease participation under
4 this act and levy, assess and collect the taxes prohibited by
5 section 301(b) (relating to general tax authorization) to the
6 extent otherwise provided by law.
7 (b) Public referendum.--Subject to the notice and public
8 hearing requirements of section 316(a) (relating to procedure
9 and administration), 325(a) (relating to procedure and
10 administration) or 334 (relating to procedure and
11 administration), whichever is applicable, a governing body may
12 elect to participate under this act by obtaining the approval of
13 the electorate of the affected county in a public referendum at
14 the November election preceding the calendar year when the taxes
15 will be initially imposed. The referendum question must state
16 the initial rate of the proposed tax.
17 (c) Increase in tax rate limited.--Following an election to
18 participate under this act, the governing body may only increase
19 the tax rate in the following cases:
20 (1) If an increase in local expenditures is necessary to
21 respond to or recover from an emergency or disaster declared
22 by the Governor.
23 (2) If the political subdivision is required to
24 implement a court decision.
25 (3) To pay interest and principal on any indebtedness
26 incurred under the provisions of 53 Pa.C.S. Pt. VII Subpt. B
27 (relating to indebtedness and borrowing).
28 (4) To pay increases in pension fund requirements which
29 are in excess of the annual average increase over the
30 immediately preceding five fiscal years.
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1 (5) To respond to a municipality declared to be
2 distressed under the act of July 10, 1987 (P.L.246, No.47),
3 known as the Municipalities Financial Recovery Act.
4 (6) To increase revenues when actual revenues decline
5 from the immediately preceding year, but only to the extent
6 of the revenue decline.
7 (7) To respond to a Federal or State statute, regulation
8 or order adding to or significantly altering responsibilities
9 and duties or requiring expenditure of county funds to the
10 extent not funded by the Federal or State Government. This
11 provision shall apply only to a Federal or State statute,
12 regulation or order taking effect after the effective date of
13 this act.
14 Section 304. Local tax study commission.
15 (a) First-year implementation.--Before any county levies,
16 assesses or collects or provides for the levy, assessment or
17 collection of any tax under the authority of this act, the
18 governing body may appoint a local tax study commission in
19 accordance with the following provisions:
20 (1) The local tax study commission shall consist of
21 five, seven or nine members appointed by the governing body.
22 One member of the local tax study commission may be a member
23 of the governing body, as deemed appropriate by the governing
24 body. No member of the local tax study commission shall be a
25 relative, by blood or marriage, of an official or employee of
26 the county. All members shall be residents of the county.
27 Representatives on a local tax study commission must
28 reasonably reflect the socioeconomic, age and occupational
29 diversity of the county.
30 (2) The governing body shall provide necessary and
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1 reasonable staff to support the local tax study commission
2 and shall reimburse the members of the local tax study
3 commission for necessary and reasonable expenses in the
4 discharge of their duties.
5 (3) The local tax study commission shall study the
6 existing taxes levied, assessed and collected by the county
7 and determine if and how the tax policies of the county could
8 be strengthened or made more equitable by adopting for levy,
9 assessment and collection one or a combination of any of the
10 following taxes: personal income tax, real estate tax, sales
11 tax or earned income and net profits tax at such levels and
12 in such combinations on permissible subjects of taxation as
13 do not exceed the limitations in this act. This study shall
14 include, but not be limited to, consideration of all of the
15 following:
16 (i) Historic rate and revenue provided by taxes
17 currently levied, assessed and collected by the county.
18 (ii) The percentage of total revenues provided by
19 taxes currently levied, assessed and collected.
20 (iii) The age, income, employment and property use
21 characteristics of the existing tax base.
22 (iv) The projected revenues of any taxes currently
23 levied, assessed and collected.
24 (v) The projected revenues of any taxes referred to
25 in this paragraph not currently levied, assessed and
26 collected by the county.
27 (4) Within 120 days of its appointment, the local tax
28 study commission shall make a nonbinding recommendation to
29 the governing body of the appropriate tax or combination of
30 taxes, identified in paragraph (3), to be levied, assessed
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1 and collected commencing the next fiscal year. Upon
2 appointment of the commission and except as provided for in
3 paragraph (5), no tax may be levied, assessed or collected
4 for the next fiscal year until receipt of the recommendation
5 of the local tax study commission. No later than 30 days
6 prior to the commencement of the next fiscal year, the
7 governing body shall accept or reject the recommendation of
8 the local tax study commission or adopt any other appropriate
9 tax or combination of taxes for the county commencing the
10 next fiscal year as provided by law.
11 (5) If the local tax study commission fails to make a
12 nonbinding recommendation within 120 days of its appointment,
13 the governing body shall discharge the appointed local tax
14 study commission and appoint itself as the local tax study
15 commission. No later than 30 days prior to the commencement
16 of the next fiscal year, the governing body shall adopt the
17 appropriate tax or combination of taxes for the county
18 commencing the next fiscal year as provided by law.
19 (6) The local tax study commission shall publish or
20 cause to be published, within 30 days of making its
21 recommendation, a final report of its activities and
22 recommendations and shall deliver the final report to the
23 chief clerk of the county who shall supply copies to any
24 interested persons upon request.
25 (7) Receipts are required for all reimbursable expenses.
26 (8) All the records, receipts, tapes, minutes of
27 meetings and written discussions of the local tax study
28 commission shall, upon its discharge, be turned over to the
29 chief clerk of the county for permanent safekeeping. The
30 chief clerk shall make such materials available for public
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1 inspection at any time during regular business hours.
2 (9) The local tax study commission shall be discharged
3 upon the filing of its final report.
4 (b) Three-year review.--
5 (1) A county that levies, assesses and collects or
6 provides for the levy, assessment or collection of any tax,
7 after having received the recommendations of a local tax
8 study commission and acted, shall continue to levy, assess
9 and collect the same tax or combination of taxes for the next
10 three fiscal years.
11 (2) Nothing in this act shall be construed to preclude
12 the governing body from changing or altering the rates of any
13 such tax or combination of taxes if it deems necessary.
14 (3) Before the third fiscal year following the county
15 action on the recommendations of a local tax study commission
16 and every third fiscal year thereafter, the governing body
17 may appoint a local tax study commission in the manner
18 provided in subsection (a). The local tax study commission
19 appointed under this subsection shall be charged with all of
20 the same powers and duties provided for the local tax study
21 commission under subsection (a).
22 (4) In the event the county does not appoint a local tax
23 study commission under this subsection after having
24 previously acted on the recommendations of a local tax study
25 commission, the county shall continue to levy, assess and
26 collect the same tax or combination of taxes for the next
27 three fiscal years.
28 SUBCHAPTER B
29 COUNTY SALES AND USE TAX
30 Section 311. Construction.
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1 The tax imposed by the governing body under this subchapter
2 shall be in addition to any tax imposed by the Commonwealth
3 under Article II of the Tax Reform Code. Except for the
4 differing situs provisions under section 313 (relating to
5 situs), the provisions of Article II of the Tax Reform Code
6 shall apply to the tax.
7 Section 312. Imposition.
8 (a) Sales.--The governing body may levy and assess upon each
9 separate sale at retail of tangible personal property or
10 services, as defined in Article II of the Tax Reform Code,
11 within the boundaries of the county, a tax on the purchase
12 price. The tax shall be collected by the vendor from the
13 purchaser and shall be paid over to the Commonwealth as provided
14 in this subchapter.
15 (b) Use.--In any county within which the tax authorized in
16 subsection (a) is imposed, there shall be levied, assessed and
17 collected upon the use, within the county, of tangible personal
18 property purchased at retail, and on services purchased at
19 retail, as defined in Article II of the Tax Reform Code, a tax
20 on the purchase price. The tax shall be paid over to the
21 Commonwealth by the person who makes the use. The use tax
22 imposed under this subchapter shall not be paid over to the
23 Commonwealth by any person who has paid the tax imposed by
24 subsection (a) or has paid the tax imposed by this subsection to
25 the vendor with respect to the use.
26 (c) Occupancy.--In any county within which a tax authorized
27 by subsection (a) is imposed, there shall be levied, assessed
28 and collected an excise tax on the rent upon every occupancy of
29 a room or rooms in a hotel in the county. The tax shall be
30 collected by the operator or owner from the occupant and paid
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1 over to the Commonwealth.
2 (d) Rate and uniformity.--
3 (1) The tax authorized by subsections (a), (b) and (c)
4 shall be imposed at a rate of 1%.
5 (2) The tax imposed by subsections (a), (b) and (c)
6 shall be uniform.
7 (e) Computation.--The tax imposed under this section shall
8 be computed in the manner set forth in section 503(e)(2) of the
9 act of June 5, 1991 (P.L.9, No.6), known as the Pennsylvania
10 Intergovernmental Cooperation Authority Act for Cities of the
11 First Class.
12 Section 313. Situs.
13 The situs of sales at retail or uses, including leases, of
14 motor vehicles, aircraft, motorcraft and utility services shall
15 be determined in the manner specified by section 504 of the act
16 of June 5, 1991 (P.L.9, No.6), known as the Pennsylvania
17 Intergovernmental Cooperation Authority Act for Cities of the
18 First Class.
19 Section 314. Licenses.
20 A license for the collection of the tax imposed by this
21 subchapter shall be issued in the same manner as is provided for
22 in section 505 of the act of June 5, 1991 (P.L.9, No.6), known
23 as the Pennsylvania Intergovernmental Cooperation Authority Act
24 for Cities of the First Class. Licensees shall be entitled to
25 the same discount as provided in section 227 of the Tax Reform
26 Code.
27 Section 315. Rules and regulations; collection costs.
28 (a) Regulations.--Rules and regulations shall be applicable
29 to the taxes imposed under section 312 (relating to imposition)
30 in the same manner as is provided for in section 506(1) and (2)
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1 of the act of June 5, 1991 (P.L.9, No.6), known as the
2 Pennsylvania Intergovernmental Cooperation Authority Act for
3 Cities of the First Class.
4 (b) Administrative costs.--The department, to cover its
5 costs of administration, shall be entitled to retain a sum equal
6 to 1% of the revenues collected under this subchapter for its
7 administrative costs. When the annual operating budget for the
8 department is submitted to the General Assembly, the department
9 shall also submit to the chairman and minority chairman of the
10 Appropriations Committee of the Senate and to the chairman and
11 minority chairman of the Appropriations Committee of the House
12 of Representatives the actual sums retained for costs of
13 collection in the preceding fiscal year, together with all
14 supporting details.
15 Section 316. Procedure and administration.
16 (a) Ordinance.--A county desiring to impose the tax
17 authorized by section 312 (relating to imposition) shall give at
18 least 60 days' written notice to every municipality and school
19 district located in the county of its intent to impose the tax
20 and shall adopt an ordinance after the expiration of 60 days
21 after the date of the notice. The notice and an ordinance shall
22 state the tax rate and refer to this subchapter. The ordinance
23 shall authorize the imposition of all taxes provided for in
24 section 312. Prior to adopting an ordinance imposing the tax
25 authorized by section 312, the governing body shall give public
26 notice of its intent to adopt the ordinance in the manner
27 provided by section 4 of the Local Tax Enabling Act and shall
28 conduct at least one public hearing regarding the proposed
29 adoption of the ordinance.
30 (b) Notification to department.--A certified copy of the
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1 county ordinance shall be delivered to the department by
2 September 1 of the year prior to the effective date of the
3 ordinance. The county ordinance shall become effective on the
4 January 1 following at least four months after the date of
5 enactment of the county ordinance.
6 (c) Delivery of repeal ordinance.--A certified copy of a
7 repeal ordinance shall be delivered to the department at least
8 30 days prior to the effective date of the repeal.
9 Section 317. County sales and use tax funds.
10 There is hereby established for each county levying the tax
11 under section 312 (relating to imposition) the (proper name)
12 County Sales and Use Tax Fund. The State Treasurer shall be
13 custodian of each such fund which shall be subject to the
14 provisions of law applicable to funds listed in section 302 of
15 the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal
16 Code. Taxes imposed under section 312 shall be received by the
17 department and paid to the State Treasurer and, along with
18 interest and penalties, less any collection costs allowed under
19 this subchapter and any refunds and credits paid, shall be
20 credited to the respective fund not less frequently than every
21 two weeks. During any period prior to the credit of moneys to
22 each such fund, interest earned on moneys received by the
23 department and paid to the State Treasurer under this subchapter
24 shall be deposited into the respective fund. All moneys in each
25 such fund, including, but not limited to, moneys credited to
26 that fund under this section, prior year encumbrances and the
27 interest earned thereon, shall not lapse or be transferred to
28 any other fund, but shall remain in that fund. Pending their
29 disbursement, moneys received on behalf of or deposited into
30 each such fund shall be invested or reinvested as are other
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1 moneys in the custody of the State Treasurer in the manner
2 provided by law. All earnings received from the investment or
3 reinvestment of the moneys shall be credited to the respective
4 funds.
5 Section 318. Disbursements.
6 (a) General rule.--On or before the tenth day of every
7 month, the State Treasurer shall make the disbursements on
8 behalf of the county imposing the tax out of the moneys which
9 are, as of the last day of the previous month, contained in the
10 respective county sales and use tax fund.
11 (b) Disbursement to counties.--
12 (1) The State Treasurer shall disburse to a county
13 imposing the tax authorized under section 312 (relating to
14 imposition) an amount of money equal to 50% of the tax
15 collected in that county and remitted to the department and
16 deposited in the respective county sales and use tax fund.
17 (2) An amount of money equal to the remaining 50% of the
18 tax collected in that county shall be allocated to all of the
19 municipalities and school districts within that county as
20 follows:
21 (i) Twenty-five percent shall be allocated to all
22 municipalities within the county. Each municipality shall
23 be allocated a portion as computed under section 320(a)
24 (relating to allocations and qualifications).
25 (ii) Twenty-five percent shall be allocated to all
26 school districts within the county. Each school district
27 shall be allocated a portion as computed under section
28 320(b).
29 (3) The State Treasurer shall disburse to a county, in
30 addition to its share under paragraph (1), an amount of money
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1 equal to the allocations to nonqualified municipalities and
2 school districts within the county.
3 (4) The county shall deposit the revenue from the
4 respective county sales and use tax fund into the county
5 general fund for disposition as provided under section 701(a)
6 (relating to sales tax revenues).
7 (c) Disbursement to municipalities.--The State Treasurer
8 shall, at the same time, disburse to the qualified
9 municipalities an amount of money equal to their allocations
10 under paragraph (2)(i). Each municipality's portion shall be
11 deposited in the municipal general fund for disposition as
12 provided in section 701(b).
13 (d) Disbursement to school districts.--The State Treasurer
14 shall, at the same time, disburse to the qualified school
15 districts an amount of money equal to their allocations under
16 paragraph (2)(ii). Each school district's portion shall be
17 deposited in the school district's general fund for disposition
18 as provided in section 701(b).
19 (e) Penalty.--If disbursements are not made on or before the
20 tenth day of each month, a 5% penalty shall be added thereto
21 plus an additional 1% late charge per month delayed.
22 Section 319. Adoption of municipal ordinances and school
23 district petitions.
24 (a) General rule.--No municipality may receive a
25 disbursement under section 318(c) (relating to disbursements)
26 and no school district may receive a disbursement under section
27 318(d) unless one of the following applies:
28 (1) Prior to enactment of the county ordinance, it
29 adopts a municipal ordinance or a school district petition
30 containing the statement:
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1 We strongly urge the county to enact a county sales
2 and use tax and intend to accept disbursements of the
3 sales and use taxes collected.
4 A municipality which does not enact an ordinance and a school
5 district which does not enact a petition in compliance with
6 this paragraph may not receive any distribution from funds
7 collected during the first 24 months immediately following
8 the initial date of imposition of the tax.
9 (2) Prior to October 1 of any year after the enactment
10 of the county resolution, it adopts a municipal ordinance or
11 a school district petition containing the statement:
12 We support the enactment by the county of the county
13 sales and use tax and strongly urge its continuation
14 and intend to accept disbursements of the sales and
15 use taxes collected.
16 (b) Delivery.--A certified copy of the municipal ordinance
17 or the school district petition shall be delivered to the county
18 commissioners on or before the enactment of the county
19 resolution or October 15 of any year thereafter, as the case may
20 be.
21 Section 320. Allocations and qualifications.
22 (a) Allocations to municipalities.--The State Treasurer
23 shall compute allocations to municipalities in the following
24 manner:
25 (1) Fifty percent of the money allocated to
26 municipalities shall be pursuant to a format in which the
27 total allocation to municipalities multiplied by the ratio of
28 weighted tax revenues of the municipality divided by the sum
29 of the weighted tax revenues of all municipalities located in
30 the county.
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1 (2) Fifty percent of the money allocated to
2 municipalities shall be returned to the municipality of
3 origin of the sales tax revenue.
4 (b) Allocations to school districts.--Each school district
5 shall be allocated a portion of the total allocation to school
6 districts which is equal to the total allocation to school
7 districts multiplied by the ratio of average daily membership of
8 the school district divided by the sum of the average daily
9 membership of all school districts in the county.
10 (c) Qualifications.--Municipalities and school districts
11 qualified to receive disbursements under section 318(c) or (d)
12 (relating to disbursements) are municipalities and school
13 districts located within the county, which:
14 (1) adopt in a timely fashion, the ordinance or petition
15 required under section 319 (relating to adoption of municipal
16 ordinances and school district petitions); and
17 (2) adopt the necessary ordinances or, in the case of
18 school districts, take the legally necessary action and
19 impose the taxes authorized under this act.
20 (d) Calculation of weighted tax revenues.--Calculations of
21 weighted tax revenues shall be made by the Department of
22 Community and Economic Development or any successor agency and
23 certified to the State Treasurer based upon information reported
24 to the Department of Community and Economic Development any
25 successor agency, subject to review, verification and approval
26 by the Department of Community and Economic Development or any
27 successor agency.
28 (e) Definitions.--As used in this section, the following
29 words and phrases shall have the meanings given to them in this
30 subsection:
20051H0036B0038 - 20 -
1 "Average daily membership." As defined by the act of March
2 10, 1949 (P.L.30, No.14), known as the Public School Code of
3 1949.
4 "Weighted tax revenues." Total tax revenues from all sources
5 of a municipality divided by the ratio of its per capita market
6 value to the per capita market value of its county.
7 "Per capita market value." The total market value of all
8 real property divided by population as determined by the most
9 recent decennial census.
10 SUBCHAPTER C
11 PERSONAL INCOME TAX
12 Section 321. Construction.
13 The tax imposed by the governing body under this subchapter
14 shall be in addition to any tax imposed by the Commonwealth
15 under Article III of the Tax Reform Code. Except for the
16 differing provisions under sections 501 (relating to credits),
17 502 (relating to low-income tax provisions) and 503 (relating to
18 regulations), the provisions of Article III of the Tax Reform
19 Code shall apply to the tax.
20 Section 322. Personal income tax.
21 In lieu of imposing the tax under section 312 (relating to
22 imposition), each county shall have the power and may levy,
23 assess and collect a tax on the personal income of resident
24 taxpayers of the county up to a maximum rate of 0.5%, in
25 increments of 0.25%. A county which imposes a tax under this
26 section may not impose any tax under section 312.
27 Section 323. Collections.
28 A county may either collect the tax imposed under section 322
29 (relating to personal income tax) or may enter into an agreement
30 with the department for collection of the tax.
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1 Section 324. Rules and regulations; collection costs.
2 (a) Regulations.--Rules and regulations shall be applicable
3 to the taxes imposed under section 322 (relating to personal
4 income tax) in the same manner as is provided for in Article III
5 of the Tax Reform Code.
6 (b) Administrative costs.--The department, to cover its
7 costs of administration under this act, may retain a sum equal
8 to 1% of the revenues collected under this subchapter for those
9 administrative costs. When the annual operating budget for the
10 department is submitted to the General Assembly, the department
11 shall also submit to the chairman and minority chairman of the
12 Appropriations Committee of the Senate and to the chairman and
13 minority chairman of the Appropriations Committee of the House
14 of Representatives the actual sums retained for costs of
15 collection under this act in the preceding fiscal year, together
16 with all supporting details.
17 Section 325. Procedure and administration.
18 (a) Ordinance.--The governing body, in order to impose the
19 tax authorized by section 322 (relating to personal income tax),
20 shall adopt an ordinance which shall refer to this subchapter.
21 Prior to adopting an ordinance imposing the tax authorized by
22 section 322, the respective governing body shall give public
23 notice of its intent to adopt the ordinance in the manner
24 provided by section 4 of the Local Tax Enabling Act and shall
25 conduct at least one public hearing regarding the proposed
26 adoption of the ordinance.
27 (b) Delivery.--A certified copy of the ordinance imposing
28 the tax shall be delivered to the department no later than 90
29 days prior to the effective date of the ordinance.
30 (c) Delivery of repeal ordinance.--A certified copy of a
20051H0036B0038 - 22 -
1 repeal ordinance shall be delivered to the department at least
2 30 days prior to the effective date of the repeal.
3 Section 326. Local personal income tax funds.
4 There is hereby established for each county levying the tax
5 under section 322 (relating to personal income tax) the (proper
6 name) Personal Income Tax Fund. The State Treasurer shall be
7 custodian of each such fund which shall be subject to the
8 provisions of law applicable to funds listed in section 302 of
9 the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal
10 Code. Taxes imposed under section 322 shall be received by the
11 department and paid to the State Treasurer and, along with
12 interest and penalties, less any collection costs allowed under
13 this subchapter and any refunds and credits paid, shall be
14 credited to the respective funds not less frequently than every
15 two weeks. During any period prior to the credit of moneys to
16 each such fund, interest earned on moneys received by the
17 department and paid to the State Treasurer under this subchapter
18 shall be deposited into that fund. All moneys in each such fund,
19 including, but not limited to, moneys credited to that fund
20 under this section, prior year encumbrances and the interest
21 earned thereon, shall not lapse or be transferred to any other
22 fund, but shall remain in that fund. Pending their disbursement,
23 moneys received on behalf of or deposited into each such fund
24 shall be invested or reinvested as are other moneys in the
25 custody of the State Treasurer in the manner provided by law.
26 All earnings received from the investment or reinvestment of the
27 moneys shall be credited to the respective funds.
28 Section 327. Disbursements.
29 On or before the April 10, July 10, October 10 and the next
30 succeeding January 10, the State Treasurer shall make the
20051H0036B0038 - 23 -
1 disbursements to each county imposing the tax out of the moneys
2 which are, as of the last day of the previous month, contained
3 in the respective personal income tax funds. If disbursements
4 are not made on or before the dates listed in this section, a 5%
5 penalty shall be added thereto, plus a 1% late charge per month
6 delayed. This section shall only apply to a county which imposes
7 a tax under section 322 (relating to personal income tax).
8 SUBCHAPTER D
9 EARNED INCOME AND NET PROFITS TAX
10 Section 331. Earned income and net profits tax.
11 In lieu of imposing the tax under section 312 (relating to
12 imposition), each county shall have the power and may levy,
13 assess and collect a tax on the earned income and net profits of
14 resident taxpayers of the county up to a maximum rate of 0.5% in
15 increments of 0.25% of 1%. A county which imposes a tax under
16 this paragraph may not impose a tax under section 322 (relating
17 to personal income tax).
18 Section 332. Collections.
19 A county imposing a tax under section 331 (relating to earned
20 income and net profits tax) shall designate the tax officer who
21 is appointed under section 10 of the Local Tax Enabling Act, or
22 otherwise by law, as the collector of the earned income and net
23 profits tax. In the performance of the tax collection duties
24 under this subchapter, the designated tax officer shall have all
25 the same powers, rights, responsibilities and duties for the
26 collection of the taxes which may be imposed under the Local Tax
27 Enabling Act or as otherwise provided by law.
28 Section 333. Rules and regulations.
29 Taxes imposed under section 331 (relating to earned income
30 and net profits tax) will be subject to the rules and
20051H0036B0038 - 24 -
1 regulations pursuant to section 13 of the Local Tax Enabling
2 Act.
3 Section 334. Procedure and administration.
4 The governing body, in order to impose the tax authorized by
5 section 331 (relating to earned income and net profits tax),
6 shall adopt an ordinance which shall refer to this subchapter.
7 Prior to adopting an ordinance imposing the tax authorized by
8 section 331, the governing body shall give public notice of its
9 intent to adopt the ordinance in the manner provided by section
10 4 of the Local Tax Enabling Act, and shall conduct at least one
11 public hearing regarding the proposed adoption of the ordinance.
12 CHAPTER 5
13 CREDITS, EXEMPTIONS AND DEFERRALS
14 Section 501. Credits.
15 The provisions of section 14 of the Local Tax Enabling Act
16 shall be used to determine any credits under the provisions of
17 this act for any tax imposed under section 322 (relating to
18 personal income tax).
19 Section 502. Low-income tax provisions.
20 The provisions of section 304 of the Tax Reform Code shall be
21 applied by any county which levies a tax under section 322
22 (relating to personal income tax) to any qualified individual.
23 Section 503. Regulations.
24 Each county may adopt regulations for the processing of
25 claims under sections 501 (relating to credits) and 502
26 (relating to low-income tax provisions).
27 CHAPTER 7
28 DISPOSITION OF TAX REVENUES
29 Section 701. Sales tax revenues.
30 (a) Counties.--One hundred percent of any additional
20051H0036B0038 - 25 -
1 revenues received by a county from the sales and use tax shall
2 be used to offset the revenues lost as a result of the
3 prohibition against imposition of the taxes enumerated in
4 section 301(b) (relating to general tax authorization) and then
5 to reduce the county real property tax by means of a homestead
6 exclusion.
7 (b) Municipalities and school districts.--
8 (1) One hundred percent of any additional revenues shall
9 be used to reduce the taxes listed in paragraph (2) and then
10 to reduce the real property tax by means of a homestead
11 exclusion.
12 (2) The taxes which shall be reduced under this
13 subsection are as follows:
14 (i) A tax based upon a flat rate or on a millage
15 rate on an assessed valuation of a particular trade,
16 occupation or profession, commonly known as an occupation
17 tax.
18 (ii) A tax at a set or flat rate upon persons
19 employed within the taxing district, commonly known as an
20 occupational privilege tax.
21 (iii) A per capita, poll, residence or similar head
22 tax.
23 Section 702. Personal income tax revenues.
24 One hundred percent of any additional revenues from the
25 personal income tax shall be used to offset the lost revenues
26 from the taxes prohibited under section 301(b) (relating to
27 general tax authorization) and then to reduce the county real
28 property tax by means of a homestead exclusion.
29 Section 703. Revenue limitation exceptions.
30 The limitations relating to the reduction or elimination of
20051H0036B0038 - 26 -
1 taxes in sections 701 (relating to sales tax revenues) and 702
2 (relating to personal income tax revenues) may be waived, but
3 only to the degree necessary, in the following cases:
4 (1) If an increase in local expenditures is necessary to
5 respond to or recover from an emergency or disaster declared
6 by the Governor.
7 (2) If the political subdivision is required to
8 implement a court decision.
9 (3) To pay interest and principal on any indebtedness
10 incurred under the provisions of 53 Pa.C.S. Pt. VII Subpt. B
11 (relating to indebtedness and borrowing).
12 (4) To pay increases in pension fund requirements which
13 are in excess of the annual average increase over the
14 immediately preceding five fiscal years.
15 (5) To respond to a county declared to be distressed
16 under the act of July 10, 1987 (P.L.246, No.47), known as the
17 Municipalities Financial Recovery Act.
18 (6) To increase revenues when actual revenues decline
19 from the immediately preceding year, but only to the extent
20 of the revenue decline.
21 (7) If the increase does not exceed the limitations on
22 millage rates for real property under the act of July 28,
23 1953 (P.L.723, No.230), known as the Second Class County
24 Code, or the act of August 9, 1955 (P.L.323, No.1307), known
25 as The County Code.
26 (8) To respond to a Federal or State statute, regulation
27 or order adding to or significantly altering responsibilities
28 and duties or requiring expenditure of funds to the extent
29 not funded by the Federal or State Government. This provision
30 shall apply only to a Federal or State statute, regulation or
20051H0036B0038 - 27 -
1 order taking effect after the effective date of this act.
2 (9) To increase revenue equal to the percentage increase
3 in the Statewide average weekly wage from the immediately
4 preceding year or 5%, whichever is less.
5 CHAPTER 9
6 REGISTER FOR CERTAIN TAXES
7 Section 901. Definitions.
8 The following words and phrases when used in this chapter
9 shall have the meanings given to them in this section unless the
10 context clearly indicates otherwise:
11 "Department." The Department of Community and Economic
12 Development of the Commonwealth or any successor agency.
13 Section 902. Register for taxes under this act.
14 (a) General rule.--The department shall have available an
15 official continuing register supplemented annually of all sales
16 and use, personal income and earned income and net profits taxes
17 levied under this act.
18 (b) Contents of register.--The register and its supplements
19 shall list:
20 (1) The counties levying a personal income tax, sales
21 and use tax or earned income and net profits tax.
22 (2) The rate of tax as stated in the ordinance levying
23 the tax.
24 (3) The rate on taxpayers.
25 (4) The name and address of the tax officer responsible
26 for administering the collection of the tax and from whom
27 information, forms for reporting and copies of rules and
28 regulations are available.
29 Section 903. Information for register.
30 The chief clerk or secretary of each county shall furnish
20051H0036B0038 - 28 -
1 information for the register to the department in such manner
2 and on such forms as the department may prescribe by certified
3 mail no later than May 31 of each year to show new tax
4 enactments, repeals and changes. Failure of the county to comply
5 with this date for filing may result in the omission of the tax
6 levy from the register for that year. Failure of the department
7 to receive information of taxes continued without change may be
8 construed by the department to mean that the information
9 contained in the previous register remains in force.
10 Section 904. Availability and effective period of register.
11 The department shall have the register, with such annual
12 supplements as may be required by new tax enactments, repeals or
13 changes, available upon request no later than July 1 of each
14 year. The effective period for each register shall be from July
15 1 of the year in which it is issued to June 30 of the following
16 year.
17 Section 905. Effect of nonfiling.
18 Employers shall not be required by any ordinance to withhold
19 from the compensation of their employees any personal income tax
20 imposed under the provisions of this act which is not listed in
21 the register or to make reports of compensation in connection
22 with taxes not so listed. If the register is not available by
23 July 1, the register of the previous year shall continue
24 temporarily in effect for an additional period of not more than
25 one year.
26 Section 906. Effect of chapter on liability of taxpayer.
27 The provisions of this chapter shall not affect the liability
28 of any taxpayer for taxes lawfully imposed under this act.
29 CHAPTER 13
30 MISCELLANEOUS PROVISIONS
20051H0036B0038 - 29 -
1 Section 1301. Effective date.
2 This act shall take effect January 1, 2006, or immediately,
3 whichever occurs later.
I22L72MSP/20051H0036B0038 - 30 -